Survey: Give Us Your Take on Amazon’s “Disappointing” Earnings

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  1. Peter says:

    The problem here is that the 38% uptick in expenses has NOTHING to do with selling Kindles at a loss. Kindle is still a very small part of Amazon’s operation. The rapidly rising expenses are coming from signing a large number of new leases for warehouses for the traditional click-and-wait etail business.

    Physical media is the largest category for online sales- and electronics is the second largest. Tablets and digital media are destroying both of these industries.

    And then you have sales tax reform coming up in a couple of years as well. Which will erode the profitability of warehouses an additional 10% or so on top of the erosion from going digital.

    And strike three for the future of click-and-wait is the shrinking of the post office and the ballooning cost of UPS and FEDEX. A lack of affordable delivery options means the future of click-and-wait ecommerce is down, not up. Those EXPENSES represent future dead weight- not future investment.

    Does Amazon think the warehouse fairy will pay for its obsolete infrastructure in a couple of years?


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