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rated:
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
Shopping habits are actually extremely hard to change.  I recall a story years ago where Target found out this teenager was pregnant (by monitoring her purchasing habits), and started sending her coupons for baby stuff. The Dad called up Target and chewed them out for sending this stuff to her teenage daughter, turns out... she was pregnant.  I was listening to a Freakonomics or Radio Lab podcast about this sometime later, and they had some marketing experts on there to talk about the reason retailers monitor this kind of thing so closely: a significant life change (marriage / new baby / etc.) is just about the only time you change people's shopping habits (i.e. steal another retailer's shoppers).

All this to say, I think WalMart (or Amazon) could raise their prices significantly before the majority of their customers started bailing.


edit: basically, what Skeemer touched on (and I agree with him that AMZN has the additional bonus of convenience. 

rated:
fatwa113t3r said:   Looks like AMZN wants to claw back some of the losses. Holding up much stronger than anticipated. I guess the institutional owners are still solidly behind AMZN for the time being.
  I added few more at 317 this morning. I hope it hits 327 by EOD today.

rated:
timr37482 said:   Just an observation, but this is a pattern that turns up from time to time, and people never learn. You guys constantly commenting on rgthree are a problem yourselves. You are the ones who love to argue for the sake of arguing and make boards a pain to read due to your lack of self control. I'm sort of giving in and doing it here, because so many just don't get it. You can put him on ignore. You can simply choose not to reply to his posts. If you think he continues to post excessively despite no one replying to him, as if he were treating this board as a twitter account, you can RA him. You can petition a return to Usenet, where readers have the useful feature of "Ignore subthread", and "Ignore poster" automatically does it. It's just sad web forums still don't implement it.

NB: To be clear, this was not a comment on rgthree. It's a comment on those who talk about him, at him, and bicker endlessly with him. It's your posts that are worthless and disruptive.

  

Agreed. Rgthree, though singularly focused on AAPL and I guess now AMZN probably because AMZN poses a challenge to AAPL, makes a contribution to this thread. Most of the people who complain hardly ever post here but to complain about rgthree. I just don't understand why people don't just ignore him if they don't like what he has to say, not that I find anything he's posted grounds to ignore him. 


On that note, bought  AAPL Aug 22 2014 97.00 Call for 2.07. 

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<< MONDAY >> July 28

after

HLF - Herbalife
MAS - Masco Corp


<< TUESDAY >> July 29

before

ETN - Eaton
IP - International Paper
LVLT - Level 3 Communications
MRK - Merck
NOV - National Oilwell Varco
PFE - Pfizer
RAI - Reynolds American
SAVE - Spirit Air
SIRI - Sirius XM Radio
UPS - United Parcel Service
WM - Waste Management

after

AMGN - Amgen
APC - Anadarko Petroleum Corp
AXP - American Express
BWLD - Buffalo Wild Wings
DWA - DreamWorks
ESRX - Express Scripts
EW - Edwards Lifesciences
GPN - Global Payments
MAR - Marriott International
PNRA - Panera
RGR - Sturm Ruger
TWTR - Twitter
VRTX - Vertex Pharma


<< WEDNESDAY >> July 30

before

ADT - ADT Corp
D - Dominion Resources
GRMN - Garmin
HES - Hess Corp
HUM - Humana
LO - Lorillard
PSX - Phillips 66
S - Sprint
SO - Southern Company
SODA - Sodastream
VLO - Valero
WLP - WellPoint

after

AKAM - Akamai
ARII - American Railcar Industries
FBHS - Fortune Brands Home & Security
KRFT - Kraft Foods
NOW - ServiceNow
TSO - Tesoro Corp
WDC - Western Digital
WFM - Whole Foods Market
WMB - Williams Companies
WPZ - Williams Partners LP
Y ELP - Y ELP


<< THURSDAY >> July 31

before

APA - Apache Corp
BUD - Anheuser-Busch InBev
BWA - BorgWarner
CL - Colgate-Palmolive
COP - ConocoPhillips
CRCM - Care.com
DDD - 3D Systems
K - Kellogg
MA - MasterCard
MPC - Marathon Petroleum Corp
OXY - Occidental Petroleum Corp
TMUS - T-Mobile
VRX - Valeant Pharma
XOM - Exxon Mobil

after

DATA - Tableau Software
EXPE - Expedia
GPRO - GoPro
JIVE - Jive Software
LNKD - LinkedIn
OUTR - Outerwall
TSLA - Tesla Motors


<< FRIDAY >> Aug 1

before

ARNA - Arena Pharmaceuticals
CLX - Clorox Co
CVX - Chevron
HLT - Hilton Worldwide
PG - Procter & Gamble
WY - Weyerhaeuser

rated:
GM still dropping again today.
If GM drops another 10% or so it might start looking attractive.
They have to run out of vehicles to recall eventually.  And most of their recalls they set up a fund for victims but they are mostly insulated from being sued because that was "old GM".

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Anybody fiddeling with LOCO?

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anyone lucky enough to get in on LOCO ipo today? Geez, it seems like every ipo just takes off nowadays.

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umcsom said:   BOT to Open 1 AMZN Call AMZN Jul 25 2014 312.50 Call Limit $7.40 Executed $7.40

I unfortunately chased this for over $100

  
SLD to Close 1 AMZN Call AMZN Jul 25 2014 312.50 Call               Executed $9.50

sold to soon I guess but still holding aug 325

rated:
drsung said:   
sandy05 said:   Why V is down so much after exceeding estimates? Good time to buy?
Edit: bought at 212.1

  
Looks like they lowered guidance a bit.  This one has been on my watchlist after trading it last year and earlier this year.  I got out at 200 during the drop from the first Russia crisis.  I will probably use this opportunity to pick up a few shares.   I think it is a great long term holding.

  I agree.  Thanks for pointing out.  Actually had been watching ma and got in a little on them also.

rated:
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
I love Amazon.  I've been a Prime member for awhile.  Returns are easy as pie. 

But I calculated that if they raised prices by 5% and double revenue in 5 years their stock would still be over-valued.
If they raised their prices by 10% it would be close to a decent valuation.  But they would lose a ton of customers if prices went 10% up across the board.  I'm already buying stuff from Costco.com, eBay, and goHastings because for some items they are 10% or more cheaper than Amazon.

I don't think Grocery is viable.  The risk of spoilage, shipping cost, and tampering is way too high.  I know some services drop off bags at door steps.  Just imagine if someone poisons the food?  Massive sue job and Amazon would be liable.

rated:
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
This is exactly how I feel about Amazon. They sucked me in many years ago with their lower prices and now have kept me hooked with the convenience and great customer service even though they are no longer the cheapest. If this truly was Bezos plan all along, then he has succeeded with me at least.

rated:
bingFB said:   
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
This is exactly how I feel about Amazon. They sucked me in many years ago with their lower prices and now have kept me hooked with the convenience and great customer service even though they are no longer the cheapest. If this truly was Bezos plan all along, then he has succeeded with me at least.

  
Unfortunately Bezo's isn't making a single red cent from your purchases or mine either.

On the conference call the CFO said on of the biggest reasons for the loss was shipping cost for Prime members.  I just bought a $10 item that cost Amazon $15 to ship.  That is crazy and unsustainable.

rated:
I hate Amazon. I hate their customer service. I hate a lot of their policies. I just in general hate the company almost as much as I hate WalMart, but I still buy something from Amazon at least once a week and, really, the only time I even visit another site is if I need some kind of cable (so I go to Monoprice).

rated:
rgthree said:   
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
I love Amazon.  I've been a Prime member for awhile.  Returns are easy as pie. 

But I calculated that if they raised prices by 5% and double revenue in 5 years their stock would still be over-valued.
If they raised their prices by 10% it would be close to a decent valuation.  But they would lose a ton of customers if prices went 10% up across the board.  I'm already buying stuff from Costco.com, eBay, and goHastings because for some items they are 10% or more cheaper than Amazon.

I don't think Grocery is viable.  The risk of spoilage, shipping cost, and tampering is way too high.  I know some services drop off bags at door steps.  Just imagine if someone poisons the food?  Massive sue job and Amazon would be liable.

  
Regarding Groceries. You're basically then saying that companies like Fresh Direct which pretty much every Manhattanite uses is not a viable business. They are. And so will Amazon Fresh.

rated:
CNC down 6.5% after getting upgrades yesterday, PT around $95, trading at $74.8

Good time to get in?

rated:
Greenlight Capital, David Einhorn's hedge fund firm, gained 7.9 percent in the second quarter, according to a letter sent to investors Friday.

According to the letter, bringing returns for the first half of 2014 to 6.4 percent net of fees.

http://www.cnbc.com/id/101868137?__source=yahoo|finance|headline...

So dudes are paying this guy hundreds of thousands of dollars a year if not millions and he's returning less than the S&P500 for the year?

rated:
rgthree said:   
bingFB said:   
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
This is exactly how I feel about Amazon. They sucked me in many years ago with their lower prices and now have kept me hooked with the convenience and great customer service even though they are no longer the cheapest. If this truly was Bezos plan all along, then he has succeeded with me at least.

  
Unfortunately Bezo's isn't making a single red cent from your purchases or mine either.

On the conference call the CFO said on of the biggest reasons for the loss was shipping cost for Prime members.  I just bought a $10 item that cost Amazon $15 to ship.  That is crazy and unsustainable.

  
That may be true, and I definitely don't speak for all consumers but even if Amazon raised their prices by 10% or increased the cost of Prime from $99 to $199 or $299 I would still continue to buy from them. Just like people get sucked into the Apple ecosystem or Google ecosystem, I have been sucked into the Amazon ecosystem, Convenience is something I just don't mind paying for.

rated:
bingFB said:   
rgthree said:   
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
I love Amazon.  I've been a Prime member for awhile.  Returns are easy as pie. 

But I calculated that if they raised prices by 5% and double revenue in 5 years their stock would still be over-valued.
If they raised their prices by 10% it would be close to a decent valuation.  But they would lose a ton of customers if prices went 10% up across the board.  I'm already buying stuff from Costco.com, eBay, and goHastings because for some items they are 10% or more cheaper than Amazon.

I don't think Grocery is viable.  The risk of spoilage, shipping cost, and tampering is way too high.  I know some services drop off bags at door steps.  Just imagine if someone poisons the food?  Massive sue job and Amazon would be liable.

  
Regarding Groceries. You're basically then saying that companies like Fresh Direct which pretty much every Manhattanite uses is not a viable business. They are. And so will Amazon Fresh.


Not every city is concentrated like NYC.  And is Fresh Direct even making money?  Or are they simply waiting to get bought out by Amazon?

I researched Amazon Fresh months ago.  The prices are beyond ridiculous.  Boneless Ribeye steak Choice grade is $21 per pound.  I can get the same cut, same grade at costco for $9 a pound.  Hell I can get PRIME cut for $17.99 at costco. For $21 per pound I can go to my local butcher and get dry aged PRIME beef.

Companies like Fresh Direct are one gas price spike or one food poisoning scandal to bankruptcy. What they do does not take alot of skill.  All they do is go shopping for you.  My 95 year old grandma can do that (bless her heart!).  The business is as antiquated as newspaper delivery.

rated:
bingFB said:   
rgthree said:   
bingFB said:   
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
This is exactly how I feel about Amazon. They sucked me in many years ago with their lower prices and now have kept me hooked with the convenience and great customer service even though they are no longer the cheapest. If this truly was Bezos plan all along, then he has succeeded with me at least.

  
Unfortunately Bezo's isn't making a single red cent from your purchases or mine either.

On the conference call the CFO said on of the biggest reasons for the loss was shipping cost for Prime members.  I just bought a $10 item that cost Amazon $15 to ship.  That is crazy and unsustainable.

  
That may be true, and I definitely don't speak for all consumers but even if Amazon raised their prices by 10% or increased the cost of Prime from $99 to $199 or $299 I would still continue to buy from them. Just like people get sucked into the Apple ecosystem or Google ecosystem, I have been sucked into the Amazon ecosystem, Convenience is something I just don't mind paying for.

  Wow.  You must have a ton of disposable income.  Or make a ton of purchases.  I make about 100 purchases a year with Prime.

If prices went up 10% or prime was $299 I would be gone in a flash.  With OSX keychain its just as easy to order goods from dozens of other websites without hassle.  I 'd still buy from Amazon but I would just get the free shipping instead of Prime.

rated:
corporateclaw said:   I hate Amazon. I hate their customer service. I hate a lot of their policies. I just in general hate the company almost as much as I hate WalMart, but I still buy something from Amazon at least once a week and, really, the only time I even visit another site is if I need some kind of cable (so I go to Monoprice).
  That sucks.  I love their Customer Service.  They always PM things for me, got a Kindle for free, a Paperwhite for $20 bucks just in the last few months.

rated:
corporateclaw said:   I hate Amazon. I hate their customer service. I hate a lot of their policies. I just in general hate the company almost as much as I hate WalMart, but I still buy something from Amazon at least once a week and, really, the only time I even visit another site is if I need some kind of cable (so I go to Monoprice).
  
Really? Are you shopping at Amazon or Awazon.

Amazon has an amazing return policy and so simple.  Just drop off at UPS.

Amazon.
Love the company as a consumer.
Like the business plan.
hate the valuation.

Amazon has been a public company for 17 years.
There total net income from 17 years is $2 Billion.
They are estimated to have a loss of $1 Billion next quarter.
Digest that.

Total Cash, Inventories, Short term investments, Accounts Receivables = $18.7 Billion
Total Accounts Payable, Liabilities due in less than a year = $18.7 Billion
Get ready for more debt. 

rated:
fatwa113t3r said:   
sandy05 said:   Anybody playing BIDU today?
  
Yes. Bought a few weekly 217.5 calls for 1.90 yesterday. Hoped for a pop before earnings to dump a few. Doesn't look like I'll get that pop. Willing to gamble through earnings though. 

  

Sold for 7. Was hoping BIDU would jump to 230+ quickly today. But the damn thing is just kept dragging on and on. 

rated:
Picked up some TRLA for 56.75. Fingers crossed.

rated:
seems like I do this every 3-4 months, but I don't get the $1 drop at TXN today so picked up some lotto scratchers for next week at 47.50

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AAPL up 0.70% on a bloody red day.

We test $100 before Ex-Div in August.

rated:
sold my yhoo calls for 4.20

rated:
skeemer said:   
SaulHudson said:   
skeemer said:   Bezos is playing the long game. He's said over and over again that he wants to grow revenues and profits will come later. The goal is to secure market share by being a low cost leader until the customer just assumes Amazon is the best place to shop. By providing competitive pricing while simultaneously eliminating the need to shop in a store, Amazon will become the default retailer for every product a consumer needs. Once they reach default status, they can begin raising margins through pricing. Will it be a successful strategy? I don't know, and I don't think anyone else really does. It is a bold move to play a 10, 20, 30 year goal and sacrificing profits the entire way. But it seems to be working as their revenues continue to increase and they are becoming real competitors in nearly every market they enter. The next big one will be grocery delivery through AmazonFresh, which is currently being tested in California.

As a consumer I am a big fan of Amazon and I am even willing to pay a moderate premium for the convenience of their service. As an investor...I would not be very interested in Amazon aside from a buy and hold for life type investment as I think it will one day be profitable, and rank with Google, Apple, and Exxon as one of the top few biggest firms in the world.

  

I agree with you that's the plan.  I don't think that it's a viable plan.  It would be like WalMart deciding that since they've put all the mom and pops out of business, they can now start raising praises and no one will notice.  Unless Amazon can put WalMart, eBay, Target, Newegg, and every online marketplace in the country out of business... consumers will notice when the prices start to rise.

  
There's a difference there though, as part of the price of the product is the service Amazon is providing.  There is value to online shopping vs brick & mortar, and vice versa.  How do you put a value on shopping from home vs the store?  If I can buy an air filter for my heat pump at Home Depot for $20 and it costs $21.50 at Amazon, which one is cheaper for me in terms of total cost to me? What is my time worth?  What's the cost of having to put my pants back on?  If/When AmazonFresh goes nationwide, how much will my wife value not having to grocery shop with a 15 month old in the cart?  $5/week?  $10?  In many cases Amazon can attach a premium for the convenience factor.  Their return policy is also fantastic and is hard to put a numerical value on, but it certainly adds value over many retailers that make it difficult to return items.

Anecdotally, my wife and I have already noticed that Amazon often isn't the cheapest retailer for many products any more.  A few years ago, I rarely found a cheaper price anywhere but Amazon (excluding sale/clearance).  This is no longer the case and although we do comparison shop quite a bit, we still buy many things on Amazon that could be bought slightly cheaper elsewhere due to the convenience factor.  We've become 'hooked' or 'tuned in' to Amazon, as it is typically the first place we price check something without thinking.

  
When the air filter is $20 at Home Depot and it's $21.50 at Amazon and they can both deliver for free in the same amount of time, it's going to sway a decent amount of people away from Amazon.  It's only a matter of time before all the big box stores starting using their brick and mortar stores at pseudo shipping warehouses.  Amazon does currently have the edge in the convenience factor.  Yet, if somebody like WalMart could get their online/instore act together, they could dominate same day delivery.  They already have a "warehouse" in every town in the country.  Those stores are playing catchup now in the instore/online game, but they'll get there.  Best Buy is a good example.  They were on death's doorstep thanks to Amazon.  But, they adjusted and are staging a comeback of sorts.

rated:
Hey everyone...this might be off-topic...but you know you can block a ignore/block a member topics/replies/messages right???

here's the step: 1) click on "My Account" 2) Click on "Tools & Alerts" 3) Add member's name to "Ignore/Block a Member" 4) insert said name and what you would like to block.

DONE!!!

rated:
corporateclaw said:   I hate Amazon. I hate their customer service. I hate a lot of their policies. I just in general hate the company almost as much as I hate WalMart, but I still buy something from Amazon at least once a week and, really, the only time I even visit another site is if I need some kind of cable (so I go to Monoprice).
  
You are literally the only person I've ever seen criticize Amazon's customer service (in real life AND on the internet). Not criticizing, just shocked to see you say that.  Is there any particular reason?
IMO they easily have the best customer service of any retailer (except maybe BB&B)

rgthree, it's hilarious how you manage to pump AAPL even in a post about about AMZN.  You're like a walking advertisement for AAPL products and services.

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