Cracks Observed in Amazon's E-Commerce Empire.

    Cracks Observed in Amazon's E-Commerce Empire. Amazon, which has grown rapidly during the pandemic, suddenly seems vulnerable. Amazon's AMZN (NASDAQ) $3.313,82 -4,29 (-%0,13) third-quarter earnings report definitely fell outside of Amazon, showing a large drop in revenue growth and operating income. In fact, it was the slowest increase since 2015. Although it is predicted that the growth will slow down after the end of the pandemic, investors were caught a little unprepared. The 3-quarter reports showed Amazon offsetting first-party sales losses thanks to AWS earnings. While AWS remains a growing cash machine, the result of this quarter appears to be more vulnerable than Amazon, and especially its e-commerce operations, have in a long time.

Cracks Observed in Amazon's E-Commerce Empire.

• Excuses

According to CFO Brian Olsavsky, these are due to supply chain disruptions, inflation in material and service costs and the biggest constraints the company faces, and labor shortages.Even delivering on the promised one-day Prime delivery in 2019 has become very difficult A New York Times report revealed that Amazon's HR system was catastrophically overwhelmed, with warehouse workers on average less than a year on the job. There's also the more existential problem that Amazon seems to be losing market share to its closest competitors.

• A reality check

Amazon still looks great for Amazon and almost every other company with 15% growth over $96 billion. Against all odds, Amazon's fourth-quarter guidance says e-commerce revenue could decline, and with the exception of AWS, it's likely to lose money once again. Amazon still looks great for Amazon and almost every other company with 15% growth over $96 billion. Against all odds, Amazon's fourth-quarter guidance says e-commerce revenue could decline, and with the exception of AWS, it's likely to lose money once again. However, it should be noted that Amazon still has a lot of competitive advantages and AWS is showing no signs of slowing down.  

Source: The Motley Fool

 

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