A CPC Strategy infographic helps explains why Amazon's (AMZN) profits and margins have been...


A CPC Strategy infographic helps explains why Amazon's (AMZN) profits and margins have been heading south. Simply put, the company's expansion efforts have put it in competition with much of the Internet. Amazon's products and services can be said to directly compete with a list of names that includes Apple, Netflix, eBay, PayPal, Google, Barnes & Noble, Rackspace, and Dropbox.

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Comments (3)
  • SwingTraders
    , contributor
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    While it appears the infographic was intended to show AMZN strategic advantages over its competitors on a space by space basis, my takeaway is more in line with the statement that AMZN profit margins are headed south. Throw in the likelihood that AMZN will be facing enforced sales tax in some key locales in the foreseeable future and you have a reason to short AMZN. The company simply cannot be all things to all people. Yes it can sell lower priced alternatives in some cases, but I doubt the company's margins do anything but continue to contract. With brick and mortar sellers refining their online sales initiatives, AMZN will be seeing pressure from all sides. I applaud the company for being innovative and growing its product offerings, but at some point investors will probably begin to see Amazon as something akin to a traditional conglomerate. When that happens, the whole will be seen as being worth less than the sum of the parts. I wouldn't be surprised to see AMZN slide to the $100 range.
    23 Dec 2011, 05:38 PM Reply Like
  • mike8599
    , contributor
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    Man I hope it slides - I'd really like to buy some more.... My fear is that the Kindle sales will push it to high. I read these stories and then I see AMZN sales numbers which are crazy high.
    23 Dec 2011, 06:39 PM Reply Like
  • Lansen
    , contributor
    Comment (1) | Send Message
     
    Once again, the demise of Amazon has been prematurely announced. This company remains the go-to destination of general online shopping, which will continue to assume primacy in the retail space. When I bought the stock at $9 a share, people were predicting that its concept would never get off the ground. It still has a long way to run.
    24 Dec 2011, 01:15 PM Reply Like
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