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Amazon.com Inc. Message Board

  • lifesweetingreencountry lifesweetingreencountry Jan 25, 2014 6:26 AM Flag

    WalMart Threat

    I'm not one to short a mo-mo like Amazon (it's a shortie boneyard) but WalMart's 'we'll be all over Amazon within 24 months' ain't good news for Amazon stockholders. Dismiss them if you will, but Wally World invented modern logistics. They have massive vendor power, warehousing and distribution. They know low margin retailing. Amazon's stock has been levitating for years on the assumption that once their infrastructure is built, they can improve their thus far miserable profits. Wal-Mart calls that assumption into question.

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    • "They have massive vendor power, warehousing and distribution. They know low margin retailing. Amazon's stock has been levitating for years on the assumption that once their infrastructure is built, they can improve their thus far miserable profits. Wal-Mart calls that assumption into question"

      Walmart has just announced a massive layoff. Also, once you get to a certain size, vendor power becomes less and less a factor. At Amazon's size, I think shorts and others tend to over-state this perceived advantage on two counts. One, that vendors don't grant that favorable terms for orders over a certain size. And, the second, even if they did, Walmart will never be about to purchase inventory below cost, which is what they would need to do to match Amazon's own cost basis for inventory which is offset by funds coming from other businesses (third-party transaction fees, cloud fees, Web service fees).

      Just this week Walmart announced laying off thousands of employees. Compared to Amazon, it is just not as efficient an operation to begin with.

      • 1 Reply to nemesis_editor_2007
      • Nemefish: Let's try some math... How much is Amazon going to sell product for below cost as you claim above? What are its 1P sales? How much NET PROFIT does it get from 3P (which I'm sure will keep listing as Amazon internal channel conflict becomes predatory...) and AWS? That is a beautiful plan for insolvency.

        The best part is that you continually put to the public record why Amazon should have its business practices under the microscope of DOJ. It will be the 3P/FBA that undermines the brand. Abusing payables terms, raising prices, asymmetrically using commingled inventory...

        This scam is coming to an end. It will be the Enron of this decade, though most of the malfeasance will lie in the financial community (still waiting for the final round of willfully negligent if not complicit, fundamentally divergent notes, where every period in the window will have lower earnings and yet a higher PT than 1 year and 2 years ago...).

    • " WalMart's 'we'll be all over Amazon within 24 months' ain't good news for Amazon stockholders."

      Don't you think we'd just respond to it as being another of numerous but futile rallying calls? After all haven't they been repeatedly declaring basically the similar statements for over the past dozen years with nothing to show for it?

      "Dismiss them if you will, but Wally World invented modern logistics."

      And at first, Amazon hired Jimmy Wright, formerly a Walmart logistics expert, to design one of the first large-scale when Amazon was in its start-up stage. This was a better-than-nothing strategy to try and get the best system up and running as soon as possible, but eventually needed to be practically scrapped and rebuilt from the bottom up. Walmart deals with bulk shipments to stores, not individually picked and packed parcels going out to many individuals, as with Tech, you know nothing about the business if you think experience in the former is transferable to the latter. The one is completely different from the other.

      Recently, they hired someone from Barnes and Noble, a company that has been crushed by Amazon, to run their e-commerce business, admitting that their own in-house efforts were too insular leading to incompetence. In other words, indicating that you can't turn a brick and mortar oriented logistics system into an e-commerce one organically. You have to go to the outside and bring someone else in, even if that is from a company that has been crushed into near bankruptcy by Amazon.

    • yeah right.....this may prove enlightening:

      http://www.businessinsider.com/amazons-profits-what-people-dont-understand-2013-10

 
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