Will Amazon Succeed In 2019?
If you are a regular online person, you must have come across Amazon. It is one of the largest online retailers on the planet today. But it didn’t just that way. As any other business, there’s always a slow period in the beginning. Back in 1994, Amazon was known as Cadabra. The owner Jeff Bezos started this prominent online shop as an online bookstore in his garage.
If you ask me, I think he didn’t actually know that it will become such a hit by the 21st century. Today, the company sells diverse products. From music CDs, cookware to games, hardware, and tools. Let’s get to the technical success of Amazon.
The company grew at an alarming rate of $150 million in 1997 to $56.6 billion rises in its revenues in 2018. However, this rise in revenue has also led to a corresponding increase in operational cost leaving the company with a substantial deficit.
Amazon Prime: Shall You Invest
Amazon Prime started as a fast and free shipping program for orders of any amount. This was one of the services that made Amazon such a great success story.
Getting free next day shipping or two-day delivery on millions of items remains the cornerstone of the service. The company then moved into many other areas, including improvements to its delivery services and discounts on groceries.
But is Amazon prime worth it? Amazon Prime costs $119 per year in the United States and offers one-day delivery, music, and instant video streaming and more. But what exactly are the benefits, and are the goods and services worth every penny?
I use Amazon Prime because the shipment is cheap. Normally, the goods on the amazon prime are more expensive than goods not on the amazon prime. However, if you like comfort, then the delivery and the simple shopping experience is great. But there are people who simply shop without knowing how expensive the goods are.
Getting Started On Amazon: Make Your Business Blooming
This is probably one of the easiest platforms to navigate around. Even the registration is quite simple. Whether you are planning to sell your products or simply buy from Amazon, there are simple steps you can follow.
You don’t need to register for the right seller account in advance. A seller account can be opened from your first listing. Meaning, if you own a buyer’s account on Amazon already, you can add your seller account to that. But there’s really no much difference in the profit margin with other online marketplaces.
On the contrary, the company majorly focuses on the products, not the sellers. So, even if you are a very successful seller, a few unfortunate incidents can cut off your revenue stream in an instant.
Future Of Amazon
“It won’t be long now.” That’s the message from Daily Reckoning writer David Stockman who says a tech crash is imminent…
“After all, Amazon is 24 years old, not a start-up. It hasn’t invented anything explosively new like the iPhone or personal computer. Instead, 91% of its sales involve sourcing, moving, storing and delivering goods. That’s a sector of the economy that has grown by just 2.2% annually in nominal dollars for the last decade, and for which there is no macroeconomic basis for an acceleration.”
Some people genuinely believe that Amazon as a company with all its success would exist forever with that success. But many critics are not so optimistic about that and are even warning others from buying Amazon Stock.
The stock market will potentially fall for Amazon as it has the most downside potential given its enormous present valuation. In the long-term, Amazon’s competitive approach for growth will fall victim of the myths of the market share supremacy. The consumer now has a surprising amount of information at their disposal, making e-commerce a channel that is here to stay. However, what the market is not buying into its valuation of Amazon are the long-term demands of its consumer base.
One other threat that Amazon has is its dependence on UPS and FedEx for its actual delivery. Amazon’s shipping costs increased by 26% between 2014 and 2015 and this was due to its free shipping promotions on Amazon Prime. These extra costs are eating away at Amazon’s bottom line and will continue to do so as Amazon seems to focus mainly on its top line growth.
The danger it faces with its free shipping promotions is that Amazon will grow increasingly relying on them and will not be able to wean themselves off without getting significant pushback from its consumer base. Shipping costs are currently on the low due to low oil prices. However, any additional cost in shipping costs will further destroy its ability to turn a profit.
In 2017 Amazon announced it was looking for a second headquarters which would bring with it 50,000 high tech workers and $5 billion in investment. This was not only because of the high taxes paid in Seattle but also because they needed more extremely talented people.
The great company builds success on great people and talent. The reputation between Amazon and the locals in Seattle that work at Amazon is not so great.
When Amazon first started building in Seattle, the locals believed the town’s luck has turned owing to the size of the company and because it was also an American based company. But, that wasn’t the case. When some locals started working for Amazon. They were disappointed at how they were treated and were stacked like they didn’t matter at all.
Well, as you can see, Amazon is one of the greatest businesses of our century. The services as much as people will try to criticize are still amazing and to those you love shopping online, then Amazon is the best place to do so. Though if you want to invest in stocks, then it’s best to approach the Amazon stocks with caution.
It may or may not be a speculation, but the company will have to step up their game just to remain on top. Those are some of the challenges any company will face when they are successful. Also on the employee experience, I personally think they should get a better work environment.
But if you’ve read any of my previous posts, then you should know that depending on one job is not the best way to go. To become a successful now, there are a few things you need to work on. Don’t just follow someone. If you got fired from your day job, then you need to be happy that happened. Sounds like an oxymoron, but look through my other posts then you will understand what I’m saying.
Image By: Markus Spiske