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  • once_on once_on May 8, 2013 2:45 PM Flag

    Morgan Stanly note hurting AMZN

    MS survey results: 11% of AMZN customers would never buy from AMZN again if they collected sales tax, and another 60% said they would spend less.

    Wow - 71% of AMZN customers would either spend less of go away .... ouch.

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    • Except those Prime customers who joined Prime basically for free video. They have limited resources and will continue their small size order with free two day shipping... And someday the analysts will correctly analyze the cost drivers for a mail order business that delivers directly to the door... Stacked loss leaders create interesting liabilities...

      • 1 Reply to techstrategy
      • Tech - I was reading through Credit Suisse report where they missed the shipping expense line by 30% ($300M) and actually claimed to have nailed it. They put out a huge piece just prior to the Q announcement on how the new fulfillment centers would drive down shipping costs - boy were they wrong.

        Turns out that even though gas prices were down almost 2% Y/Y shipping expense once again outgew revenue (26% vs 21%). As we have discussed this is related to the ASP declines in the biz that swamp out any advantage the fulfillment centers may be offering. So, go spend $Billions on FC's, fact is the economics are like quick sand for AMZN and will eventually suffocate them.

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