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post #41 of 46
Quote:
Originally Posted by jragosta View Post

Not quite. Their business strategy seems to be "we don't make significant profit on anything, but we'll make it up in volume". Growth for growth's sake is not turning out to be a winning strategy. Year after year after year, they keep telling investors "look at how much we've grown. Now that we've grown so much, we'll start making money next year". And year after year after year, the profits are disappointing (they're actually losing money now).

It is totally unfathomable how they were getting P/E ratios of several thousand last year - and the stock hasn't suffered much even when their profits disappeared entirely. Why in the world would you pay a massive premium for a company which has nice revenues, but has never figured out how to make a profit on them? And what little advantage they have is going away - as more and more states are taxing Internet sales.

I think that's the reason Amazon is so heavily betting on things like the Kindle and services like Prime. These help make their system "sticky".

Otherwise, simply being the best price garners no loyalty, and is incredibly difficult to maintain.

I think it's worked to a certain degree, as personally I'm more likely to buy something on Amazon without shopping around (and it may not be the cheapest price) because I'm conditioned to think the deal is good and Prime makes things so stinking convenient.

If Amazon doesn't make their system sticky, they'll be in a world of hurt as they eventually lose their low cost advantage. Which they will, because someone can always go cheaper, internet sales tax is inevitable, and Amazon can't lose money indefinitely.

It's so stupid how their stock is valued, even if they flip the switch to profitability, they'll NEVER generate the profitability to justify the valuation. Obviously investors like blue sky vs cold hard fundamentals.
post #42 of 46
Quote:
Originally Posted by jragosta View Post


Let's see if we can understand this business model:

- Sell the hardware at cost.
- Add tens of millions of dollars in new employees to support the buggy hardware.
- Sell popular ebooks below cost.

Not clear how they're going to make money with that.

Oh, wait. They're not making money. 1smoking.gif

Don't worry, you are not required to understand Amazon's business plan. After all, if you would understand how their business works maybe you would be in the place of Jeff Bezos, a billionaire, instead of wasting your time on an obscure forum, right? :smokey: 

post #43 of 46
Quote:
Originally Posted by Pendergast View Post


I think that's the reason Amazon is so heavily betting on things like the Kindle and services like Prime. These help make their system "sticky".

Otherwise, simply being the best price garners no loyalty, and is incredibly difficult to maintain.

I think it's worked to a certain degree, as personally I'm more likely to buy something on Amazon without shopping around (and it may not be the cheapest price) because I'm conditioned to think the deal is good and Prime makes things so stinking convenient.

If Amazon doesn't make their system sticky, they'll be in a world of hurt as they eventually lose their low cost advantage. Which they will, because someone can always go cheaper, internet sales tax is inevitable, and Amazon can't lose money indefinitely.

It's so stupid how their stock is valued, even if they flip the switch to profitability, they'll NEVER generate the profitability to justify the valuation. Obviously investors like blue sky vs cold hard fundamentals.

 

Its a game of hot potato.  Wall Street will keep raising the stock price and try to lure the little guys to invest in it.  Then they will pull the rug out and pocket the profits.  Bezo's does not care because by then he would have already sold hundreds of millions worth of stock options. 

 

The good thing is 70% of the stock is owned by institutions and 20% by insiders.  This is the biggest fraud ever.  Small investors need to be smart and stay away from Amazon. 

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post #44 of 46
Quote:
Originally Posted by NelsonX View Post
 

Don't worry, you are not required to understand Amazon's business plan. After all, if you would understand how their business works maybe you would be in the place of Jeff Bezos, a billionaire, instead of wasting your time on an obscure forum, right? :smokey: 

 

I'd end up in jail if I tried to do what Jeef Bezos and his Wall Street friends are pulling off.

 

And since when is Amazon the company making BILLIONS?

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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post #45 of 46
Quote:
Originally Posted by NelsonX View Post

Don't worry, you are not required to understand Amazon's business plan. After all, if you would understand how their business works maybe you would be in the place of Jeff Bezos, a billionaire, instead of wasting your time on an obscure forum, right? 1smoking.gif  

Or maybe I don't have a criminal mentality that would make me foist a ponzi scheme on investors.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #46 of 46

I just don't see people buying these in mass.

 

First off they are not that much cheaper than the real deal.  The 7 inch Fire without adds is $244.  You can get a Mini with a bigger screen and a wider screen that has a similar footprint for only $85 more.  To me the extra screen width and height (the Fire is very narrow) is a big plus. 

 

Same deal with the 8.9 fire.  Again the Apple iPad is 9.7 and wider for only $90 more.  Plus with the new design the iPad5 will look much better than the large bezel Fires.  Only the most tight budgeted consumers will see saving less than $100 on a device they use everyday for several years to be a determining factor.  I admit I bought a Fire 2 years ago.  But it was $199 and the cheapest iPad was $499.  If a mini was available no doubt I would pay the extra $130.  Thats okay.  I'll get an iPad5 with 128GB soon.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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