Making Money on the Web
Amazon.com
The Amazon Story
Amazon is the beginning of an investment saga that will grow on for years to come. Amazon has lower prices than most bookstore prices. Amazon has many features that people love about it. It greets you every time you visit Amazon.com and it suggest new books to read. Amazon occupies the leading retail position in the world. And it sells far more than just books. In 1998 Amazon stock soared. The stock gained an incredible 966%. In 1999, Amazon solidified its mark on the internet. From then on it started to decline. People started to realize this. So they dropped there stock with Amazon. They realized that the dream was over. There were hundreds of stocks doing better than Amazon. Although, people say that the company still has great growth potential, the best stock days are over.
Making Profit
Services generated about $225 million in sales for the 2001 year. That's 7% of the companies $3.1 billion in total revenue for that year. Amazon's biggest business earned about 29% gross margin last year. That was in the sale of books, CD's and DVD's. It's smallest unit, services had 68% gross margin in 2001 and it generated about 100% in sales for the first half of the 2002 year. Amazon's vice president says the company has meaningful commitment to make more deals but want to remain selective. Last year Amazon gained about 34% more sales as compared to overall U.S. internet traffic. The reason for this is because Amazon has more products. This deal gives Amazon a "leg-up" on the competition.
Sales Soar
In 1999, the company had huge gains in sales. It brought in more than $250 million, mostly due to the strong holiday season. After dropping nearly 7% in early sales, they rose about 8% in sales. Amazon was the most traded stock today. With about 30 million shares trading hands. But Keith Benjamin has other ideas. he says that the numbers will catch up and justify the current market. Keith also says that company will have sufficient losses for the next few years in order to balance it out.
Success Story?
At first Amazon looked like it was going to be a winner. Having huge profits and earnings. This made everybody get real excited about the company. People started buying stock and people were making a lot of money off of the company. This was looking like a real success story. Then the company started doing not so good. Customers were displeased and stopped buying things from Amazon.com. Then the company started to lose profit and earnings and everything looked bad in the future. As of today, the company is still wanting for that kick up that made them achieve what they did in the past.
References
http://www.cabot.net/amazonstory.htm
http://www.cio.com/archive/101502/tl_ec.html
http://news.com.com/2100-1017_3-219720.html