More Amazon Fees May be on the Horizon
May 16, 2013
According to CRN, “Growth Concerns Dog Amazon” and it may affect its clients across the board. The company’s stock sank 6% in recent markets and it only reinforces concerns for the company’s continued expansion. In the United States, Amazon is the largest Internet retailer, has seen slower revenue this quarter and it is not taking off in other countries. Amazon looks all right in its long-term plans, however. It continues to expand its digital products as well as SaaS capabilities that project well.
Amazon continues to steal business from physical retailers, even though they have found ways to reclaim some of the market. Amazon stock is trading quite high, but third-party (3P) sellers are generating profit:
“First-quarter 3P unit growth was 33 percent, down from a 40 percent growth rate in the first quarter of 2012, according to Ken Sena, an analyst at Evercare Partners…. In a 3P transaction, Amazon books commissions from third-party sales on its marketplace as revenue. That revenue is almost all profit, so as the 3P business has grown, Amazon’s gross profit margins have expanded.”
Amazon has spread itself thickly across many markets, so it might be seeing slow growth at the moment but it will pick up again. The company has stability, but in order to reclaim the lost profit they may look at raising fees. Tack on a few extra dollars, who will notice?
Whitney Grace, May 16, 2013
Sponsored by ArnoldIT.com, developer of Beyond Search
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