Online shopping has hit fever pitch in the United States. Some shop online for fear of going out and the dangers malls, department stores and outlet malls present. Others shop online for the comfort of having items conveniently delivered to your doorstep. Needless to say millions of people did their Christmas shopping online or from their phones this year and Amazon.com's bottom line is showing it.
Over the years, Amazon.com has built relationship with its suppliers, whether they be individuals or companies looking to sell inventory online using Amazon's platform. Everything from books, to electronics, jewelry and clothing, Amazon has it. This Christmas season Amazon added 3 million people to their Amazon Prime 2-Day delivery service and with this type of influx of users, Amazon put a strain on sales for big box corporations like Wal-Mart and Best Buy.
Company Snapshot (Yahoo! Finance Data)
Name: Amazon.com Inc. (as of close of business 12/30/2015)
Ticker: AMZN
Current Price: $689.07
52 Week High Price:$696.44
52 Week Low Price: $285.25
Market Capitalization: $325.3B (Large Capital)
Price/Earnings (P/E Ratio): 979.46
Earnings/Share (EPS): $0.69
Dividend: No Dividend Paid
Industry: E-Commerce
Primary Business: Internet & Catalog Retailer
The Good
Amazon.com has become a centralized place for people to do business to buy and sell a tremendous variety of things. Suppliers are using Amazon's marketplace to sell their products and pay Amazon a portion of profits for platform use. Amazon also has it's own inventory of products that it sells generating even more profits. For example, the Kindle Fire tablet is one of Amazon's most popular products that brings Amazon in to competition with heavy hitters in personal electronics like Apple and Samsung.
Amazon also spun off it's web service as a basis for companies to expand their cloud computing capabilities. Its a free service that you can use, so small business owners check it out especially if you're looking to maintain a database of customers or maintain inventory. Amazon Web Service is the best cloud platform available right now and generates a lot of traffic through its sites. This makes it appealing to companies looking for low cost options for cloud computing, making Amazon a competitor to the likes of Salesforce and Microsoft in cloud services.
Lastly Amazon is building out its own fleet of delivery trucks, planes and have plans to user drones to deliver your items directly to your front door. With this type of capability, they have catapulted to the top spot for online retail. And with the addition of Sunday delivery, Amazon is staking its claim to be on top for a long time.
The Bad
The only issue I can foresee is Amazon becoming competitive with various companies in such a way that some companies stop supplying them with items to sell on the Marketplace. Amazon becomes competition for small companies because they begin to produce the same products, but offer lower prices because they have economies of scale on their side to buy in bulk and sell at a lower price with smaller profit margins. This would change the amount of money that Amazon gets from providing the Marketplace.
The Ugly
The ugly part of why people are shopping online so much in part is out of fear of going to malls or stores. People get in fights and some killed over items in the store on sale when inventory runs low. This senseless chaos paralyzes people and confines them to their homes. In a time when we should be at peace and have joy in our hearts because this time many years ago God sent His Son to be an example of how to love each other, we are so very much at war. My prayer for 2016 is for peace and love for all mankind. Hope you have an amazing start of the New Year.
Til 2016 folks...
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