The Big Bad Console Thread - Sway your Station with an Xboner !

Soygen_sl said:

The difference in cost between 2day and overnight is pretty astronomical. I can't imagine Amazon wasting money if they don't have to, but I agree that they can definitely be cray cray.

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Here once again is the familiar Amazon (AMZN) paradox: The e-commerce king from Seattle has made a habit of losing money of late-in three of four quarters over the last year-yet its stock price is near an all-time high, following a 35 percent jump over the last 12 months.

Now we have a fresh example of this living, breathing corporate contradiction. Amazon just posted a healthy $17.09 billion in net sales during its third quarter, a 24 percent jump compared with the same period a year ago. But the company lost 9? per share. This is what amounts for good news to Amazon shareholders: Analysts had predicted sales of $16.77 billion and accurately predicted that 9? loss.

Naturally, shares rose about 1.5 percent in after-hours trading.

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Why do some stores succeed while others fail? Retailers constantly struggle with this question, battling one another in ways that change with each generation. In the late 1800s, architects ruled. Successful merchants like Marshall Field created palaces of commerce that were so gorgeous shoppers rushed to come inside. In the early 1900s, mail order became the "killer app," with Sears Roebuck leading the way. Toward the end of the 20th century, ultra-efficient suburban discounters like Target and Walmart conquered all.

Now the tussles are fiercest in online retailing, where it's hard to tell if anyone is winning. Retailers as big as Walmart and as small as Tweezerman.com all maintain their own websites, catering to an explosion of customer demand. Retail e-commerce sales expanded 15 percent in the U.S in 2012-seven times as fast as traditional retail. But price competition is relentless, and profit margins are thin to nonexistent. It's easy to regard this $186 billion market as a poisoned prize: too big to ignore, too treacherous to pursue.

Even the most successful online retailer, Amazon.com, has a business model that leaves many people scratching their heads. Amazon is on track to ring up $75 billion in worldwide sales this year. Yet it often operates in the red; last quarter, Amazon posted a $41 million loss.Amazon's founder and chief executive officer, Jeff Bezos, is indifferent to short-term earnings, having once quipped that when the company achieved profitability for a brief stretch in 1995, "it was probably a mistake."

Look more closely at Bezos's company, though, and its strategy becomes clear. Amazon is constantly plowing cash back into its business. Its secretive advanced-research division, Lab 126, works on next-generation Kindles and other mobile devices. More broadly, Amazon spends heavily to create the most advanced warehouses, the smoothest customer-service channels, and other features that help it grab an ever-larger share of the market. As former Amazon manager Eugene Wei wrote in a recent blog post, "Amazon's core business model does generate a profit with most every transaction . The reason it isn't showing a profit is because it's undertaken a massive investment to support an even larger sales base."

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