Over the next few weeks, the monopolists at Amazon will launch private label items, from nuts to detergents to coffee to diapers, under the brands Happy Belly, Wickedly Prime, Mama Bear etc.
This is a huge step, one obviously copied from major supermarket chains, that will boost margins and further Amazon’s goals to decimate and destroy all physical stores in favor of a virtual world.
To me, this is a huge affront across the bows of PG, CLX, CL and other household names. The entry of Amazon into this sector, via private labels, means that pricing power will be challenged for the manufacturers of consumer goods. Studies have shown that people don’t recognize the difference between private labels and professionally managed brands made by companies like Church and Dwight.
Typically, private labels retail for 25-40% less than branded labels and have proven to be very effective tools in re-negotiating better deals for retailers with manufacturers.
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This is some gangster shit. Wickedly prime?
This deviates completely from the prophecy….Costco was to be the last bastion of retail!
Profit margins are in the mid-30% and heading to the low-40% within the next five years. This is an unmistakable monopoly hiding in plain sight.
Ok, now I see why you are long AMZN. Let me help you out
profit margin = net income / gross revenue
AMZN TTY: $1116 million / $113.4 billion = 1.0%
AMZN 2016Q1: $513 million / $29.1 billion = 1.7%
So profit margins are in the mid-1%s, moving to the low-2%s.
Not sure if you were using the wrong numbers, new to investing, or just Cramering, but you just severely weakened your position
I think it was just erroneous use of “profit margin” in place of “gross margin”.
The numbers bushwalker used would be correct for gross margin.
Yeah, I was thinking I was probably a bit harsh/unfair after I posted that…
Sorry—gross margin is correct.
They already launched brands in Food and Clothing. Not surprising, considering that Amazon is becoming the next Walmart.
What will be critical is how their brands are made, marketd, and received. Walmart brands are the lowest quality items available anywhere in the US, in my experience.. Sales is the only thing that matters to Walmart (extra Soylent).
Amazon will end up being more evil than walmart. It more consolitation of market. You have just three amazon mega warehouses that replaced hundreds of thousands of store fronts.
Not only will Amazon destroy retail and vast amounts of jobs, it will destroy the American experience of shopping and commercial real estate.
So one hand
Malls
– having trouble attracting customers and therefore attracting retailers
-> retail sales and sq fottage rates drop
On the other hand
Millenials
– like experiences
– have trouble finding affordable living space
– don’t own cars
– love convenience
Obvious solution – > convert empty stores into apartments for Millenials.
Advantages
– Millenials can walk to shopping
– Malls gets more customers
– Millenials often work in malls anyway
– Malls have less vacant footage
I’m dead serious. Some may ask, ” who would want to live in a mall?” and I’ll counter “Who would want to live in an open-concept, high-ceiling, industrial-style loft?”
Windows are the biggest issue to creating livable space within malls.
That’s some good out-of-the-big-box thinking, btn.
In University towns, students will live almost anywhere that is cheap and can offer shuttle buses to campus. If it also allows them to shop, dine, see movies, socialize with peers, and get groceries without a car, they will flock to it.
States need to do away the tax free out of state purchase. It hurts state tax revenue and the online store do not need this crutch any longer.
Legally, it is mostly out of states’ hands. The Supreme Court ruled pre-internet sales that states could not tax goods shipped from companies with no internet presence.
States generally don’t have a way to enforce sales tax on goods sent by out-of-state vendors, but they can require companies that have “operations” within their state to collect tax on sales delivered to customers in the state.
California has a “use tax”, which state residents are supposed to pay on goods that were purchased from out of state for use in the state, but it relies on self-reporting by the taxpayer.
With Amazon doing more 1-day and same-day delivery from warehouses, it increasingly has to have facilities and operations close to customers, and therefore will be collecting sales tax in more and more states.
When the 2 companies merge, should it be called Amamart? Or Walmazon?
Amazon has lobbied hard to start charging state tax.