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Amazon.com, Inc. Message Board

  • hzliu hzliu Apr 24, 2002 1:58 AM Flag

    The core BMV order down 20% in 1Q2002

    if you count only new sale excluding the marketplace sale. As indicated in Q report, marketplace was 23% of total order, that mean new sale took 76% compared 96% of 1Q2001. Considering only 8% revenue growth Y-Y, it is not hard to conclude that the core BMV sale was down big due to marketplace cannibalizing. One used BMV sold means one new BMV unsold. When publisher and authors will not make money, AMZN will be a hot target. The ratio of marketplace BMV sale could reach 90% in future and AMZN become EBAY in BMV. Any comment.
    I just don't see the long term picture of AMZN. Please do some serious discussion not emotion.

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    • H> if you count only new sale excluding the marketplace sale. As indicated in Q report,
      H> marketplace was 23% of total order, that mean new sale took 76% compared 96% of
      H> 1Q2001. Considering only 8% revenue growth Y-Y, it is not hard to conclude that the core
      H> BMV sale was down big due to marketplace cannibalizing. One used BMV sold means one
      H> new BMV unsold. When publisher and authors will not make money, AMZN will be a hot
      H> target. The ratio of marketplace BMV sale could reach 90% in future and AMZN become
      H> EBAY in BMV. Any comment.

      It's not that simple. First of all, you need to use unit figures. 23% of total orders were marketplace orders, but these orders are 1 unit per order whereas regular orders tend to have multiple units per order. Thankfully Amazon gave unit percentages this time. They were 12% in Q1 2002 vs. 2% in Q1 2001. But revenue on marketplace orders is not the full selling price of the item. Instead it's 15% of the selling price plus either $0.99 or a monthly fee. We'll have to guess at what percentage of the selling price that Amazon gets to record as revenue. It's likely somewhere around 20% to 25%. That would mean that 12% of units only had 20-25% of the selling price recorded as revenue. That would make marketplace units accounted for about 2.4% to 3% of revenue in Q1 2002 vs about 0.4% to 0.5% in Q1 2001. So it looks like new book sales probably grew by about 5% y-o-y. And overall book unit growth about 15%. (I doing the math in my head so pardon me if I'm a little off.)

      I would agree there's probably some cannibalization. Maybe a lot. But I doubt it's ever going to get anywhere near 90%.

 
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