The Whale
500ish.com
500ish.com
Revenue 2012 - $61B
Revenue 2016 - $136B
Income 2012 - $15B
Income 2016 - $48B
Don't forget that Amazon has 2x the market cap of Wal-Mart–but only slightly above 1/4 of their the annual revenue.
What they should really do is not rely on a single indicator.
There are many places where that has been happening for over a century...
Will that model still be applied worldwide?
Sure, the market cap is interesting, but this is an interesting article because it makes a compelling case that a $400B company is cheap even when Walmart outsells it and FedEx out delivers.
It was only a few years ago people complained about how Amazon didn't make any profits because they would reinvest them all in growth, and how that was impossible to sustain that.
They were right, but not in the way they thought. It does seem to be impossible to keep investing all the profits in growth - they are just making too much!
So, it's the combination of this growth AND the market cap that is unprecedented. No one can tell if it is overvalued, but complaining about talking about the Cap is missing a pretty amazing story.
I now live in australia, I really miss the website (they only sell e-books here so far).
http://www.news.com.au/finance/business/retail/amazon-launch...
If I were Gerry Harvey or Richard Murray (CEO of JB Hifi) - I'd be _very_ worried...
And both are totally irrelevant to their operation, and a decimal point in their revenue. They could close them tomorrow and nobody would care.
Whereas for Walmart their stores are essential to their operation.
Anything that canabalizes physical store revenue is going to have to fight beauracratic headwinds. So while Walmart online may be necessary (in the same way Office 365 / on iOS & Android was), I don't have much faith on their being able to organizationally get there in a timely manner with sufficient resources.
Far more companies seem to recognize changing marketplaces and then botch business transitions by not being aggressive enough vs simply missing the changing marketplace signals.
Anyway, AWS was once a decimal point in their revenue too. In fact it's around 10% right now, but very important in terms of profit.
Furthermore - you said "Walmart's model is to have a store in every town in America". Amazon wants a piece of that $480 B in revenue too. You can't steal all of that revenue by only being online.
Compared to what?
What e-shop has at least same level web experience, same level delivery, same level customer service, same breadth, same trust, etc, all together?
And don't mention some niche web store that sells like 1 item to enthusiasts, where the owner personally mails the products...
Which makes sense, because the price difference is essentially the ammortized cost of a physical store.
That's because the price is also important, it's not some 1850's world, where value is everything.
People can sell on the price and make billions.
They won at the same game by outcompeting others at selling commodity junk. Great. How? Same way. They had leaders whose business won the lottery and simultaneously didn't care about other humans to the same infinitesimally small way necessary to win that big (one can lose big with that give-no-f*cks mindset too, hence the lottery).
Selling crap isn't interesting. Show me somebody that makes a similar-sized dent in human health, the environment, or world peace then I think the fawning Medium articles will be worth it.
First of all, all 3 companies have very different business models.
Second, Apple never sold "commodity junk". The company sold (and sells) on the high end of the market, they take a different approach to design than competitors, use more expensive materials, machining, etc., design lots of their own internals (from logic board part to processors, even their own OS and programming languages, and create their products end to end (hardware to software), and come to market with lots of firsts (e.g. from small stuff like magsafe or the best trackpad in PC-land, to hi-dpi etc). And of course have won all kinds of design, quality awards.
Third, Facebook doesn't sell anything (except ads). What's the "commodity junk" they sell? Their service is junk? Compared to what? MySpace and similar competitors, whose websites were crap even at the time? What's the better social network people aren't on?
Fourth, Amazon? Has a first tier store, a first tier web service business. What's the commodity junk they sell? If you mean actual products on their store, then they sell everything, from expensive high end stuff to mass market cheap products. And of course, for ages, they started with books -- where there's nothing "commodity crap" about them, books are books, whether a high end bookstore sells them or Amazon does.
>Same way. They had leaders whose business won the lottery
If your explanation of 3 of the biggest companies on earth is "won the lottery" then you're missing a lot. Might a well invoke God.
>Selling crap isn't interesting. Show me somebody that makes a similar-sized dent in human health, the environment, or world peace then I think the fawning Medium articles will be worth it.
You conflate businesses with NGOs or revolutionary parties.
Which is a valid comparison for some aspects, but not one that can conclude that "businesses are not interesting" when speaking about business.
The marketcap and "I want it all"-scale don't make businesses interesting. What's interesting are things that can't be quantified well and therefore can't be competed on by hard work and assholery.
If you think "less literal" everything is "junk" compared to personal health and/or love.
>The marketcap and "I want it all"-scale don't make businesses interesting. What's interesting are things that can't be quantified well and therefore can't be competed on by hard work and assholery.
For your own definition of "interesting".
But Amazon, FP, Apple (and tons of other subjects) are still interesting if we use the common, agreed upon, dictionary, traditional definition of the term interesting: "arousing curiosity or interest; holding or catching the attention.".
And there's few things about Apple, FB, and Amazon's success stories that can be "quantified well", as their story and success goes beyond their financial status. How about why and how they succeeded?
In fact, most of my purchases go into 3 buckets:
1) Standard but I don't want crap--probably I'm going to a retailer website and picking it up (Target, Frys, etc. -- NewEgg is my exception to actually having brick and mortar). If I can pick it up, it's probably at least a notch or two above crap.
2) Total crap--probably ordering from Alibaba--not Amazon.
3) Something I need to go to a store for
To me, Amazon is being used decreasingly by everybody around me.
* Just a few months ago, I was able to buy something at Best Buy for only 10% more (~$30) than it would have cost to order from Amazon.
* On the other hand, I purchased a part for my clothes drier at 400% markup because I needed the part right away.
* I bought a personal hygiene item on Overstock because it was 260% of the cost at Macy's.
* We just started buying shampoo from Amazon because it's far cheaper (33%) than from Walgreens.
* My wife buys all of our socks, underwear, and most of my children's clothes online for ~50% of the in-store price.
Being "able" to buy 10% MORE doesn't sound like any kind of a deal. In fact, it sounds like the opposite...
Yeah, just not by anybody that actually affects their rising retail revenue.
I'm not even sure how this idea about "crap" works. If you order e.g. a Dell or an Apple laptop or a Sony camera or a WD HD or a Philips bulb etc, on Fry's or Best Buy etc, you'll get something different that if you order those on Amazon?
What's the idea here?