Re:Why Amazon Has No Profits and Why It Works
by baddox on Friday September 05, 2014 @11:58PM
(#8277461)
> Saying that Amazon doesn't make a profit depends on a misleading definition of the word "profit".
It's only misleading if you pick a definition of "profit" at random rather than investigating the definition being used in the article. As the article states, Amazon's gross profit is over 20%. And the article briefly hints that gross profit is not a very useful metric. It's certainly of little immediate relevance to Amazon's investors.
Re:Why Amazon Has No Profits and Why It Works
by vasilipupkin on Friday September 05, 2014 @02:30PM
(#8275485)
it's not profit in the sense that we assume that amazon investors would be worse at reinvesting cash from existing operations than amazon management. It could very well be true now, but it may also not be as true as you think. That's why it's not really profit in the true sense of the word.
Saying that Amazon doesn't make a profit depends on a misleading definition of the word "profit". Amazon's individual operations do generate a profit, except for the new bleeding-edge expansions into new businesses. Those things run at a loss, fed by the profitable wings of the company. And when they become profitable, they become a part of the other side of the machine and Amazon expands further.
Amazon simply chooses to invest every penny of profit into growth. Somehow we don't consider that "profit".