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(News.com.au)   Amazon makes $219 million a day and is laughing their way to the bank, right? Actually, their net profit was only $108 million for the entire 90-day period, including free shipping   (news.com.au) divider line 53
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912 clicks; posted to Business » on 15 Jul 2014 at 12:45 PM (50 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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ZAZ [TotalFark]
2014-07-15 10:31:11 AM  
Amazon is keeping prices low to destroy the competition, then as a monopoly it can charge what it likes. So a better long term investment than earnings would suggest.
 
2014-07-15 12:49:50 PM  
It's spending all it's cash on new technologies, like drone delivery.

And those drones ain't cheap.
 
2014-07-15 01:00:09 PM  
So suicide bombing every competing store in America isn't a profitable business? Shocker.
 
2014-07-15 01:08:59 PM  

ZAZ: Amazon is keeping prices low to destroy the competition, then as a monopoly it can charge what it likes. So a better long term investment than earnings would suggest.


Everyone believes that this is where Amazon is heading, but in this environment with the amount of crazy VC money piling into any "disruptive company," I don't see where Amazon can suddenly turn on the switch and start making healthy margins. They have definitely built scale and certainly shouldn't be judged completely by their profits, but they are operating in a space where companies are cannibalizing each other for revenue (or worse "eyeballs") with no regard for operating income.
 
2014-07-15 01:12:32 PM  
while spending dick on employee wages....these guys are as bad if not worse than walmart.
 
2014-07-15 01:15:29 PM  
We covered this a few days ago, subs. Amazon puts a large percentage of their profits back into building their infrastructure, so while the excess profits aren't by any means impressive, they're constantly growing.
 
2014-07-15 01:22:16 PM  

ZAZ: Amazon is keeping prices low to destroy the competition, then as a monopoly it can charge what it likes. So a better long term investment than earnings would suggest.


I keep hearing this theory and I don't buy it.  The retail industry is notoriously low margin.  Bezos is just happy growing and keep his margins small.
 
2014-07-15 02:32:36 PM  
Plus....this is 'after book-keepers'. They have a 'net profit' of X using Hollywood accounting. And that's being generous.
 
2014-07-15 02:33:37 PM  

Fark like a Barsoomian: So suicide bombing every competing store in America isn't a profitable business? Shocker.


Walmart disagrees with you.
 
2014-07-15 03:04:17 PM  
Profit =/= cash flow
Profits = the amount that you have to pay taxes on
Cash flows = the amount that you could potentially pay out to investors.

For FY 2013, Amazon had a net profit of $274 Million, but operating cash flows of $5.475 Billion.  They chose to reinvest $3.444 Billion of that into capital expenditures.  As an investor, I would look at whether that $3.444 million is being used to maintain the existing level of operations or to grow the company and its ability to generate even more cash for me in the future.
 
2014-07-15 03:20:23 PM  
They have always had very thin margins, which would make anyone wonder how long can they continue to do that, I mean I understood in the beginning, but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.
 
2014-07-15 03:33:17 PM  

Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.


um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?
 
2014-07-15 03:43:02 PM  

mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?


What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.
 
2014-07-15 03:59:48 PM  
Since profit is the result of paying your employees less value for the labor they invest in the company having low profit but high revenue sounds like a well run company
 
2014-07-15 04:12:24 PM  
 
ZAZ [TotalFark]
2014-07-15 04:56:31 PM  
Profits = the amount that you have to pay taxes on

One of the articles I read about Enron pointed out that despite great paper success, the company was paying minimal taxes. IRS rules are better at revealing substance than accountants' reports to shareholders.
 
2014-07-15 05:23:46 PM  

Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.


They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.
 
2014-07-15 05:30:40 PM  

bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.


Depends where you work.
 
2014-07-15 05:38:40 PM  

umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.


THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.


THAT


Amazon is a better place to work than Wal Mart for a lot of reasons
 
2014-07-15 05:47:41 PM  

umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.


Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.
 
2014-07-15 05:51:13 PM  

umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.


Yep. Bezos' philosophy: "When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we'll take the cash flows."

And unlike startup companies that are desperately hoping to "achieve scale" before the cash runs out, Amazon achieved scale years ago. They could choose to stop pumping the cash flow back into growth at any time and the business would pump out literally billions of dollars a year for its investors. But as long as Bezos thinks he can spend a dollar this year for five dollars five years from now, he will continue to do so.
 
2014-07-15 05:55:30 PM  
Yeah, $108 million dollars for 90 days.
What a bunch of slacking losers.
 
2014-07-15 06:01:34 PM  
cash flow isn't taxed, but profits are.

Amazon has $5.4 billion in cash flow, but also has nearly $5 billion in non-cash expenses. so Amazon paid tax on just $500 million of that.

don't worry, Amazon doesn't appear to be using any Irish/Dutch/Cayman tax plans, its corporate tax rate is 32%
 
2014-07-15 06:02:55 PM  

Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.


Ultimately what you're saying is Amazon is incredibly capitalistic, the class of investors who have invested the most (in this case, the employees who have invested in the form of labor) are receiving the lion's share of the revenue. This is a sign that Amazon is well run. If I wasn't averse to working to such a large company I would actually respond to the dozens of recruitment emails they send me simply because they value their employees more than their one-and-done stock investors (who are essentially worthless once you payback more than your IPO in dividends).
 
2014-07-15 06:11:54 PM  

Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.


For the tenth time, it "cost them $4.9 billion" because they wanted it to cost them $4.9 billion. Those aren't fixed costs. Those costs include the money that everybody is telling you about. Now stop posting so you stop looking stupid.
 
2014-07-15 06:16:05 PM  

Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.


One of the things I always love about these threads is people who can't even read a balance sheet telling Jeff Bezos how badly he is running his company.

Here's what Amazon's cash flow looks like. It generated $5.5 billion in cash flow last year, of which it reinvested almost $3.5 billion on "capital expenditures" -- primarily building more data centers for AWS and more warehouses/distribution centers for shipping stuff. (That investment in turn is why the cash flow for 2014 will probably be around $7 billion.)

"But", I hear you cry, "isn't that still a razor thin margin on their huge revenues?". No, I whisper. As a %age revenues, that's still impressive cash flow. In fact, Amazon's margins are a couple of points better than Walmart, Target, or Costco, for example, all of which are regarded as financially well-run companies.

The great thing about cash flow as a financial measure is that it can't be fooled.
 
2014-07-15 06:17:29 PM  

rwdavis: Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.

Ultimately what you're saying is Amazon is incredibly capitalistic, the class of investors who have invested the most (in this case, the employees who have invested in the form of labor) are receiving the lion's share of the revenue. This is a sign that Amazon is well run. If I wasn't averse to working to such a large company I would actually respond to the dozens of recruitment emails they send me simply because they value their employees more than their one-and-done stock investors (who are essentially worthless once you payback more than your IPO in dividends).


Wow, did I say all that? All I said, third time now, was that they operate on very thin profit margins, some businesses do really well with that, look at Walmart, but really that's all I have been saying, I did not say one thing, and you can look back at everything I said, about value on employees, or being capitalistic.
 
2014-07-15 06:25:13 PM  

umad: Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.

For the tenth time, it "cost them $4.9 billion" because they wanted it to cost them $4.9 billion. Those aren't fixed costs. Those costs include the money that everybody is telling you about. Now stop posting so you stop looking stupid.


I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.
 
2014-07-15 06:31:38 PM  

Zizzowop: Wow, did I say all that? All I said, third time now, was that they operate on very thin profit margins, some businesses do really well with that, look at Walmart, but really that's all I have been saying, I did not say one thing, and you can look back at everything I said, about value on employees, or being capitalistic.


...and as people keep telling you, that's completely wrong. Amazon operates on very good margins for a retailer -- better than Walmart, Target, or Costco on a cash flow basis.

Then they take most of that cash and reinvest it to generate even greater cash flow next year, which means that their net revenues appear much smaller.

Look, I'm sorry that you don't apparently understand the relationships between revenue, net profit, and free cash flow. But if Amazon were operating on "very thin profit margins", it wouldn't be investing $3.5B in new capital while still showing a net profit.
 
2014-07-15 06:41:52 PM  

Zizzowop: I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.


No, it probably cost them around $13 to source, store, and ship to you. Of the $2 profit, they took around $1.70 and invested that in growing the business and reported the remaining 30c as net revenue.

*sigh* This really isn't that complicated once you let go of the imaginary notion, repeated by the press, of Amazon's razor thing margins, and look at the reality of the actual numbers.
 
2014-07-15 06:52:43 PM  

czetie: Zizzowop: I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.

No, it probably cost them around $13 to source, store, and ship to you. Of the $2 profit, they took around $1.70 and invested that in growing the business and reported the remaining 30c as net revenue.

*sigh* This really isn't that complicated once you let go of the imaginary notion, repeated by the press, of Amazon's razor thing margins, and look at the reality of the actual numbers.


I think what Amazon really has going for them, aside from a growing web services biz, is the fact that they pay their employees well, and despite what someone else in this thread said, I know this is true. Compared to big retail stores that don't pay well, they do, and what Bezos either knows or doesn't-I think he knows, he's not stupid, is that by paying retail associates squat, it has ultimately affected their customer service, which honestly is all brick and mortar retail stores have to their advantage. Then there's the case that when customers flood the fitting rooms at Macy's on busy sales days, all the merchandise gets piled up, then put away weeks later, sometimes longer, which means customers can't find the stuff, ultimately causing them to order it online. Until retail stores figure out that whole scenario is what's killing them, Amazon will continue to do well. So yeah, I'm not disillusioned by press reporting, I just didn't take many business classes to understand cash flows and capital expenditures, but like I said, I think there's more to it than that. Retail stores need to look back to the old days when they paid salespeople better, who in turn built better customer relationships, but they won't so long as they can get cheap labor.
 
2014-07-15 06:59:19 PM  

Zizzowop: umad: Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.

For the tenth time, it "cost them $4.9 billion" because they wanted it to cost them $4.9 billion. Those aren't fixed costs. Those costs include the money that everybody is telling you about. Now stop posting so you stop looking stupid.

I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.


It sounds to me like you need to put your money where your mouth is and start shorting Amazon. I will continue to go long since I don't have my head up my ass.
 
2014-07-15 07:03:37 PM  

umad: Zizzowop: umad: Zizzowop: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

Ungodly? I don't think so, there's a huge difference between sales and income. They might have $5billion in sales, but it cost them $4.9 billion, kind of like if you put $5000 into a car you paid $1000 for then sold it for $6200. You only made $200. Sure, if the volume is huge, you can run on thin margins, but a thin margin is still a thin margin, which I already said. All you need is a two-fold increase in shipping costs and your penny margin just got cut to like a half cent or less. Why do you think Amazon was against having to charge sales tax, that was like most of their profit.

For the tenth time, it "cost them $4.9 billion" because they wanted it to cost them $4.9 billion. Those aren't fixed costs. Those costs include the money that everybody is telling you about. Now stop posting so you stop looking stupid.

I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.

It sounds to me like you need to put your money where your mouth is and start shorting Amazon. I will continue to go long since I don't have my head up my ass.


Go for it, I'm not an investor.
 
2014-07-15 07:06:29 PM  

Zizzowop: I'm not an investor.


You don't say. None of us could tell from your completely ignorant posts.
 
2014-07-15 07:07:55 PM  

Zizzowop: czetie: Zizzowop: I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.

No, it probably cost them around $13 to source, store, and ship to you. Of the $2 profit, they took around $1.70 and invested that in growing the business and reported the remaining 30c as net revenue.

*sigh* This really isn't that complicated once you let go of the imaginary notion, repeated by the press, of Amazon's razor thing margins, and look at the reality of the actual numbers.

I think what Amazon really has going for them, aside from a growing web services biz, is the fact that they pay their employees well, and despite what someone else in this thread said, I know this is true. Compared to big retail stores that don't pay well, they do, and what Bezos either knows or doesn't-I think he knows, he's not stupid, is that by paying retail associates squat, it has ultimately affected their customer service, which honestly is all brick and mortar retail stores have to their advantage. Then there's the case that when customers flood the fitting rooms at Macy's on busy sales days, all the merchandise gets piled up, then put away weeks later, sometimes longer, which means customers can't find the stuff, ultimately causing them to order it online. Until retail stores figure out that whole scenario is what's killing them, Amazon will continue to do well. So yeah, I'm not disillusioned by press reporting, I just didn't take many business classes to understand cash flows and capital expenditures, but like I said, I think there's more to it than that. Retail stores need to look back to the old days when they paid salespeople better, who in turn built better customer relationships, but they won't so long as they can get cheap labor.


First you respond to my post against what I expand upon what you said, and then you post this. I'm honest not sure where you side with on the issue of Amazon being a well run business,
 
2014-07-15 07:16:39 PM  

Brainsick: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.

THAT


Amazon is a better place to work than Wal Mart for a lot of reasons


Ive never worked at Wal Mart, so I wont dispute your claim. I have worked at Amazon though and it sucked.

Unless you're OK with low pay, playing the temp to hire game, and lousy (almost non existent) raises.
 
2014-07-15 07:24:06 PM  

BigOle8point: Brainsick: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.

THAT


Amazon is a better place to work than Wal Mart for a lot of reasons

Ive never worked at Wal Mart, so I wont dispute your claim. I have worked at Amazon though and it sucked.

Unless you're OK with low pay, playing the temp to hire game, and lousy (almost non existent) raises.


Did you work at a warehouse? Because yeah, warehouse work sucks. When I think of 'working at Amazon', I'm thinking of all the people I know who work for the company in other capacities here in Seattle. Sorry for the confusion

/I applied at a Wal-mart once, before I got in to radio; I ran out at top speed after the first indoctrination class
 
2014-07-15 07:31:11 PM  

Brainsick: BigOle8point: Brainsick: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.

THAT


Amazon is a better place to work than Wal Mart for a lot of reasons

Ive never worked at Wal Mart, so I wont dispute your claim. I have worked at Amazon though and it sucked.

Unless you're OK with low pay, playing the temp to hire game, and lousy (almost non existent) raises.

Did you work at a warehouse? Because yeah, warehouse work sucks. When I think of 'working at Amazon', I'm thinking of all the people I know who work for the company in other capacities here in Seattle. Sorry for the confusion

/I applied at a Wal-mart once, before I got in to radio; I ran out at top speed after the first indoctrination class



So when you think of those that work at Wal-Mart, do you only think of those that work in the corporate office too?
 
2014-07-15 07:40:00 PM  

rwdavis: Zizzowop: czetie: Zizzowop: I get it, so the $15 keychain camera I bought only cost them like $1 to have made and ship to me for free. I doubt it.

No, it probably cost them around $13 to source, store, and ship to you. Of the $2 profit, they took around $1.70 and invested that in growing the business and reported the remaining 30c as net revenue.

*sigh* This really isn't that complicated once you let go of the imaginary notion, repeated by the press, of Amazon's razor thing margins, and look at the reality of the actual numbers.

I think what Amazon really has going for them, aside from a growing web services biz, is the fact that they pay their employees well, and despite what someone else in this thread said, I know this is true. Compared to big retail stores that don't pay well, they do, and what Bezos either knows or doesn't-I think he knows, he's not stupid, is that by paying retail associates squat, it has ultimately affected their customer service, which honestly is all brick and mortar retail stores have to their advantage. Then there's the case that when customers flood the fitting rooms at Macy's on busy sales days, all the merchandise gets piled up, then put away weeks later, sometimes longer, which means customers can't find the stuff, ultimately causing them to order it online. Until retail stores figure out that whole scenario is what's killing them, Amazon will continue to do well. So yeah, I'm not disillusioned by press reporting, I just didn't take many business classes to understand cash flows and capital expenditures, but like I said, I think there's more to it than that. Retail stores need to look back to the old days when they paid salespeople better, who in turn built better customer relationships, but they won't so long as they can get cheap labor.

First you respond to my post against what I expand upon what you said, and then you post this. I'm honest not sure where you side with on the issue of Amazon being a well run business,


I never said they weren't well run, and I really don't know much about their cloud/web services business. I know that with other products, they sell stuff really cheap, and even with big volume, it still seems risky to me, but like I said, and someone else pointed out, I should look more closely at the cash flows. Even if I'm wrong, and I probably am, risky business doesn't mean they aren't run well, they just take risks. I'm ok with that.
 
2014-07-15 07:40:34 PM  

Brainsick: Did you work at a warehouse? Because yeah, warehouse work sucks. When I think of 'working at Amazon', I'm thinking of all the people I know who work for the company in other capacities here in Seattle. Sorry for the confusion


From a strictly rational economist point of view, it makes sense.

Amazon has done an amazing job of automating its warehouse operations, including investing a lot of money in robotics (yeah, Google gets the sexy headlines, but it's Amazon that's actually been running fleets of practical robots for a decade). So for people to still have jobs in the warehouses they have to be cheaper and/or better than a robot, and the constant advances in robotics capabilities and falling costs mean that equation keeps getting worse for the people in question.

(Actually, there is one exception to that. It's hard to beat humans for seasonal work to handle surges in demand around Christmas because you can hire them short term. Until Amazon can rent robots for the short term, that flexibility will be the one area where humans excel. But it almost goes without saying, temp warehouse work isn't exactly well paid.)
 
2014-07-15 07:46:38 PM  

BigOle8point: Brainsick: BigOle8point: Brainsick: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.

THAT


Amazon is a better place to work than Wal Mart for a lot of reasons

Ive never worked at Wal Mart, so I wont dispute your claim. I have worked at Amazon though and it sucked.

Unless you're OK with low pay, playing the temp to hire game, and lousy (almost non existent) raises.

Did you work at a warehouse? Because yeah, warehouse work sucks. When I think of 'working at Amazon', I'm thinking of all the people I know who work for the company in other capacities here in Seattle. Sorry for the confusion

/I applied at a Wal-mart once, before I got in to radio; I ran out at top speed after the first indoctrination class


So when you think of those that work at Wal-Mart, do you only think of those that work in the corporate office too?


Nope, I think of the thousands of retail workers that routinely get screwed. I live and work in Seattle and a lot of my clients are Amazon related, so I tend to think of the 40,000 or so people who are employed in Seattle when I think 'Amazon'. I am fully aware that there are other offices and warehouses, Amazon is a big company, as is Wal-mart. My previous post was a shorter version of this because i was attempting to understand in what capacity you worked for Amazon. Please continue biting your own neck if it helps.
 
2014-07-15 07:46:49 PM  

Zizzowop: They have always had very thin margins, which would make anyone wonder how long can they continue to do that, I mean I understood in the beginning, but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.


It would, because they have assets, and expenses they control more directly (like payroll). The not-profit portions of their cash-flow aren't 100% COGS.
 
2014-07-15 07:47:19 PM  

Zizzowop: rwdavis: Zizzowop: czetie: Zizzowop: I never said they weren't well run, and I really don't know much about their cloud/web services business. I know that with other products, they sell stuff really cheap, and even with big volume, it still seems risky to me, but like I said, and someone else pointed out, I should look more closely at the cash flows. Even if I'm wrong, and I probably am, risky business doesn't mean they aren't run well, they just take risks. I'm ok with that.


Just FYI, Amazon is pretty much the current king when it comes to cloud services by a pretty big margin.

// Used to work on a Windows Azure team
 
2014-07-15 07:50:11 PM  

Brainsick: BigOle8point: Brainsick: BigOle8point: Brainsick: umad: Zizzowop: mr lawson: Zizzowop: but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

um, because they are plowing the money back into r&d and infrastructure instead of listing it as a profit?

What money, they don't make much money to plow back into r&d, their margins are thinner than a whet thin.

They make ungodly amounts of money. If you only make one penny of profit on a widget but sell a billion of them, you still made a billion pennies. It is common knowledge that they pour damn near everything they make back into the company.

THIS

stappawho: bromah: while spending dick on employee wages....these guys are as bad if not worse than walmart.

Depends where you work.

THAT


Amazon is a better place to work than Wal Mart for a lot of reasons

Ive never worked at Wal Mart, so I wont dispute your claim. I have worked at Amazon though and it sucked.

Unless you're OK with low pay, playing the temp to hire game, and lousy (almost non existent) raises.

Did you work at a warehouse? Because yeah, warehouse work sucks. When I think of 'working at Amazon', I'm thinking of all the people I know who work for the company in other capacities here in Seattle. Sorry for the confusion

/I applied at a Wal-mart once, before I got in to radio; I ran out at top speed after the first indoctrination class


So when you think of those that work at Wal-Mart, do you only think of those that work in the corporate office too?

Nope, I think of the thousands of retail workers that routinely get screwed. I live and work in Seattle and a lot of my clients are Amazon related, so I tend to think of the 40,000 or so people who are employed in Seattle when I think 'Amazon'. I am fully aware that there are other offices and warehouses, Amazon is a big company, as is Wal-mart. My previous post was a shorter version of this because i ...


Confirmed Amazon Fanboi
 
2014-07-15 07:50:30 PM  

Zizzowop: Even if I'm wrong, and I probably am, risky business doesn't mean they aren't run well, they just take risks. I'm ok with that.


You should check out the Bezos link I posted earlier (and which I'm too lazy to find again). In there, it talks about how Bezos explicitly chooses to take a lot of risks, and is willing to let several things fail in order to find one good one. He runs it much like a VC investing in startups, fully expecting 9 out of 10 to fail.

He is very smart about it, though. He designs each risk in such a way that the potential downside is small and the potential upside is very big (the current buzzword for this approach is "optionality" because of the analogy to financial options). When he finds a hit, the cash flow from the established businesses allows him to scale it up very rapidly, which makes it much harder for anybody else to piggy back on his risk taking.

So yes, Amazon takes risks -- but they are carefully calculated, well-run risks.

By the way, Warren Buffett is an admirer of Bezos. Buffett too places more emphasis on cash flow than other measures, in large part because cash flow is reality.
 
2014-07-15 07:56:33 PM  

BigOle8point: Confirmed Amazon Fanboi


aaaaaaaaaaaand, we're done
akiwood.com

/for a second there, i thought you were interested in actual conversation
 
2014-07-15 07:58:16 PM  

czetie: Zizzowop: Even if I'm wrong, and I probably am, risky business doesn't mean they aren't run well, they just take risks. I'm ok with that.

You should check out the Bezos link I posted earlier (and which I'm too lazy to find again). In there, it talks about how Bezos explicitly chooses to take a lot of risks, and is willing to let several things fail in order to find one good one. He runs it much like a VC investing in startups, fully expecting 9 out of 10 to fail.

He is very smart about it, though. He designs each risk in such a way that the potential downside is small and the potential upside is very big (the current buzzword for this approach is "optionality" because of the analogy to financial options). When he finds a hit, the cash flow from the established businesses allows him to scale it up very rapidly, which makes it much harder for anybody else to piggy back on his risk taking.

So yes, Amazon takes risks -- but they are carefully calculated, well-run risks.

By the way, Warren Buffett is an admirer of Bezos. Buffett too places more emphasis on cash flow than other measures, in large part because cash flow is reality.


I apologize for coming off totally two-faced, probably because I'm not a big risk taker, but I admire those who do, kind of like Randall says in Clerks, I hate people, but I like gatherings. I'm trying though, took a big risk with a new job, it's a startup, hope it works out, but it might not, I'll take the experience regardless. It's originally out of Russia, which is why I was skeptical at first, but oh well, it's all about cars, so that peaked my interest.
 
2014-07-15 08:58:43 PM  

xaks: Fark like a Barsoomian: So suicide bombing every competing store in America isn't a profitable business? Shocker.

Walmart disagrees with you.


Well, shiat. You're right.

So the lesson here is... Amazon needs to open brick and mortars.

There Amazon, xaks and I will need to be paid when you save your company with our idea.
 
2014-07-16 07:54:09 AM  

Zizzowop: They have always had very thin margins, which would make anyone wonder how long can they continue to do that, I mean I understood in the beginning, but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.


I read an article awhile back comparing Amazon to a company like Apple when it comes to profits. The writer's theory was that a company like Apple, makes ridiculous profit margins, but at the same time they are in a super competitive space, and all it takes is for one of their competitors to develop the next thing and their profits would take a big hit. Amazon on the other hand makes tiny profits, but they have spent so much money developing their infrastructure and making things efficient to the point where it would cost a huge fortune for another company to set up and actually be competitive with them. So in that sense at least their profits, while small are a lot more safe.
 
2014-07-16 09:48:44 AM  

mechgreg: Zizzowop: They have always had very thin margins, which would make anyone wonder how long can they continue to do that, I mean I understood in the beginning, but they have been around more than a decade now and make very little profit compared to sales, it wouldn't take much to cause them to just shut down completely.

I read an article awhile back comparing Amazon to a company like Apple when it comes to profits. The writer's theory was that a company like Apple, makes ridiculous profit margins, but at the same time they are in a super competitive space, and all it takes is for one of their competitors to develop the next thing and their profits would take a big hit. Amazon on the other hand makes tiny profits, but they have spent so much money developing their infrastructure and making things efficient to the point where it would cost a huge fortune for another company to set up and actually be competitive with them. So in that sense at least their profits, while small are a lot more safe.


It's an interesting theory, apart from the fact that Amazon doesn't make tiny profits.

It makes very good profits, most of which it reinvests to make even better profits down the road.
 
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