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Amazon Stores: Why We Should Be Afraid

Indeed, many of the reasons Amazon may be interested in brick-and-mortar stores have little to do with books, specifically. Shipping from a store instead of a warehouse or giving customers the ability to buy online and pick up in store or return items to a store could help Amazon trim its fulfillment costs, which amounted to 13% of sales in 2015 versus 12% in 2014.

Amazon.com Delivery Truck
Amazon.com Delivery Truck

Slightly more on the upcoming Amazon.com invasion in your neighborhood…

Indeed, many of the reasons Amazon may be interested in brick-and-mortar stores have little to do with books, specifically. Shipping from a store instead of a warehouse or giving customers the ability to buy online and pick up in store or return items to a store could help Amazon trim its fulfillment costs, which amounted to 13% of sales in 2015 versus 12% in 2014.

Counterintuitively, having physical stores could help Amazon become more profitable. Shipping costs are variable costs for e-commerce players, meaning they rise along with sales. Brick-and-mortar stores, on the other hand, have fixed costs such as labor, rent and utilities and can gain leverage by boosting sales on top of them.

(click here to continue reading Amazon Stores: Why All Retailers Should Be Afraid – WSJ.)

Amazon Brick and Mortar Location
Amazon Brick and Mortar Location

One wonders if the timing of this rumor at all coincides with Amazon.com reporting quarterly results not in line with Wall Street estimates…

Amazon recorded it largest ever quarterly profit over the holiday quarter but missed Wall Street’s estimates by a wide margin, sending its share price into a tailspin.

Shares in the world’s largest online retailer plunged 12% on Thursday after it announced a net profit of $482m for the three months ending 31 December – up from $214m a year earlier. The company notched up $35.75bn in sales in last year’s final three months.

It was the first time Amazon has reported three consecutive profitable quarters since 2012, but the gain was less than analysts had been expecting. Analysts, however, were expecting $36bn in sales and net income of $754m.

(click here to continue reading Amazon shares plunge after missing holiday quarter estimates | Technology | The Guardian.)

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