07-26-2014, 12:45 PM
"Amazon's expansionist spending spree is taking its toll. Beyond the $126 million loss, it said it expects to lose up to $810 million in the upcoming quarter — compared with a $25 million loss in the third quarter last year.
Forrester analyst Sucharita Mulpuru blamed the loss solely on Amazon's Prime program, which offers two-day free shipments to customers for $99 a year.
"Google, Apple and Facebook invest all the time in innovation, and don't have losses like this," she says. "The big difference is Amazon is spending all this money on shipping those orders."
The costs of free shipping are larger than Amazon expected when it started the program. Amazon, she says, has "created a beast they now have to feed."
http://www.usatoday.com/story/tech/2014/.../13107009/
Haven't all of us bought something with free shipping that cost less than what we know shipping alone would have been? If Amazon is looking at losing a billion dollars total through next quarter, I'm sure they are going to take a long hard look at Alaska and Hawaii shipments and our gravy train could come to an end. If you've been on the fence about ordering that large/heavy/bulky item.... maybe get it sooner rather than later.
I know somebody who sells a product on Amazon.com for $16.99 and his prices as a merchant have skyrocketed over the last year and a half, with Amazon now taking almost $7 of that $16.99. I don't think they can squeeze much more out of the merchants, so the customers are next.
Forrester analyst Sucharita Mulpuru blamed the loss solely on Amazon's Prime program, which offers two-day free shipments to customers for $99 a year.
"Google, Apple and Facebook invest all the time in innovation, and don't have losses like this," she says. "The big difference is Amazon is spending all this money on shipping those orders."
The costs of free shipping are larger than Amazon expected when it started the program. Amazon, she says, has "created a beast they now have to feed."
http://www.usatoday.com/story/tech/2014/.../13107009/
Haven't all of us bought something with free shipping that cost less than what we know shipping alone would have been? If Amazon is looking at losing a billion dollars total through next quarter, I'm sure they are going to take a long hard look at Alaska and Hawaii shipments and our gravy train could come to an end. If you've been on the fence about ordering that large/heavy/bulky item.... maybe get it sooner rather than later.
I know somebody who sells a product on Amazon.com for $16.99 and his prices as a merchant have skyrocketed over the last year and a half, with Amazon now taking almost $7 of that $16.99. I don't think they can squeeze much more out of the merchants, so the customers are next.