retail news in context, analysis with attitude

Despite persistent criticisms that it is a company without a profitable business model, Amazon yesterday "posted its fourth straight profit, boosted by a 28 percent sales increase," CNBC reports.

According to the story, "Amazon reported first-quarter net income of $513 million, or $1.07 per share, on $29.13 billion in revenue. Those figures compare with a loss of 12 cents per share and $22.72 billion in sales for the previous year."

The story also notes that "the company's fourth straight quarter of earnings assures some company watchers who have questioned whether it can maintain profitability. Operating income also spiked to $1.1 billion in the quarter, up from $255 million in the prior-year period."

In a message to shareholders, CEO/founder Jeff Bezos said, "Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year. Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. We’re building premium products at non-premium prices, and we’re thrilled so many customers are responding to our approach."

The CNBC story points out that one of the company's bright lights, Amazon Web Services, saw its sales go up 64 percent to $2.57 billion from $1.57 billion in the prior-year period.
KC's View:
To me, it is Bezos' comments about proprietary technological devices that are the most interesting. There are two reasons. First, it means that Amazon understands that much of its future will be determined by how successful it is selling products that are unique to its store. And second, so many of these technologies are designed to make it easier for people to buy other stuff on Amazon.

The ecosystem grows. And these days, at least, it is showing a profit.