Amazon Growing Moat Via Prime Advancements

Dec. 17, 2022 11:19 PM, Inc. (AMZN)26 Comments
Nexus Research profile picture
Nexus Research


  • Amazon Prime has essentially set the industry standard for customer service and has raised the bar for shipping and delivery services.
  • The introduction of ‘Buy with Prime’ essentially eliminates the need to list products on the Amazon marketplace to benefit from industry-leading fulfillment capabilities and access loyal Prime members.
  • Amazon has wisely expanded Prime membership benefits beyond offering fast and free delivery to shoppers; Prime members have various other reasons to visit
  • Persistently enhancing Prime benefits to embolden the Prime network effect is indeed capital intensive, hence, compressing profit margins.
  • Amazon’s Prime service relies on a strenuous fulfillment & logistics labor force that continues to be the source of legal troubles amid unethical business practices.

Amazon fulfillment center building in Las Vegas

4kodiak/iStock Unreleased via Getty Images

Amazon’s (NASDAQ:AMZN) position on top of the e-commerce industry is underpinned by its self-reinforcing network effect from Amazon Prime. For over a decade, Amazon has been consistently advancing the appeal of the Prime subscription service, attracting

Streaming content expenditure 2022

Source: Bloomberg

Amazon operating margin

Source: macrotrends

This article was written by

Nexus Research profile picture
Striving to uncover long-term investment opportunities (10+ years) through in-depth research and analysis. Nexus Research seeks to evaluate and compare business strategies to determine a company’s potential for market penetration, revenue growth and profit margin expansion. During market downturns, stocks often become cheap very fast, creating various investment opportunities at once. Amid such circumstances, investors often lack the time to research a company thoroughly before making investment decisions, out of fear that they will miss out on attractive entry points. Therefore, Nexus Research not only uncovers present-day buying opportunities, but also offers extensive insights on solid companies with promising growth potential despite expensive valuations, thereby allowing investors to be ready and make well-informed investment decisions when the stock becomes more reasonably valued.

Disclosure: I/we have a beneficial long position in the shares of SHOP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (26)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.