Amazon.com Inc. is tapping some of the biggest athletic-apparel suppliers to make a foray into private-label sportswear, according to people familiar with the matter, setting the stage for further upheaval in an already-tumultuous industry.
According to a Bloomberg article.
As soon as the rumors spread, stocks of sportswear firms lost 4%. Same happened few days ago within the postal industry.
Is there anything this company cannot do? Amazing...
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If by growth, you mean strictly revenue growth, then yes, Amazon most likely will continue to be a juggernaut. But keep in mind that Amazon spends cash on a wide variety of projects, many of which become unsuccessful. The firm is willing to lose money if it believes that the project will result in incremental users who enter the Amazon ecosystem.
Yellowstone errupting or an asteroid hitting the earth.
If Yellowstone erupted, Amazon would just sell protective suits or something. I guess an asteroid is the only option.
My first thought: Azure building more momentum and unseating AWS among professionals (which on an anecdotal level may be starting).
Much more of Amazon's net comes from AWS than many people realize - and margins elsewhere are weaker (relatively of course).
Your second point is correct. AWS is just 9% of Amazon's revenue but 75% of its operating income, in FY 2016.
Walmart sure is going after AWS.
A major FTC investigation/lawsuit would stop them...maybe?
And cause fallout to small businesses that sell on Amazon, while enraging loyal Amazon customers? I don't think so.
Start to pay dividends
Rising wages, competition in cloud services
Jeff Bezos getting hit by a bus.
European Union
The DOJ.
Amazon is clearly a top 5 tech company at this point in history but it's not hard to spitball a few scenarios that would unseat if not kill them completely: * EU anti-trust lawsuit - bitch and moan all you want about it, but it's a factor * Russian/Chinese concentrated hacking attack * US government imposes new taxes on e-commerce * any combination of new taxes/tariffs by other countries * Any number of websites or company store websites could band together under a new flag * Any major internal scandal could rip Amazon apart, or serious legal infraction
If you think any company/ranking is beyond contest, then consider: * big-5 accounting (or big6 for that matter) Yeah. It was a thing. * Lehman Brothers * Napster * MySpace * Yahoo * AOL * Apple's cultural dominance (it died with Steve Jobs) * The British Empire
NOTHING lasts forever. Make your money while you can but keep an eye on the big picture.
+1. Was waiting for a ZH reference somewhere.
Some of these points are valid, but I don't agree with the core analysis here.
The biggest threat is a successful anti-trust lawsuit filed by the DOJ, which breaks up Amazon into multiple pieces, similar to what happened to John D. Rockefeller's Standard Oil in 1911 and AT&T in 1982. However, the government case against Amazon is a lot weaker because in the two aforementioned cases, both firms had a virtual monopoly on the U.S. oil and telephone markets, respectively, and controlled every aspect of the vertical chain. Amazon, in contrast, controls approximately 45% of the U.S. online retail market. It's a dominant position but nowhere close to a monopoly. Moreover, Amazon's presence in traditional brick and mortar retail is still negligible (they are working to beef this up with Amazon Go, Amazon bookstore, and other physical stores), which is important because only 7% of U.S. retail transactions in 2016 were done online. The vast majority of U.S. shopping is still done the old fashioned way, where people visit stores, look at the merchandise, talk to customer service, and get the full comprehensive experience of shopping that one cannot get online.
I'm not sure how a new e-commerce tax would cripple Amazon. They already pay one of the highest corporate effective tax rates in the country, at around 35-40%, and it's not clear to me that customers would abandon Amazon en masse and shop in brick and mortar stores due to a tax (assuming the tax is not a crazy amount). In the online retail space, there aren't viable competitors that offer the breadth of products at the low prices and shipping benefits. I also don't see customers abandoning Amazon to go through the inconvenience of brick and mortar shopping because of a small transaction tax (again, it would need to be a very large tax to fundamentally alter customer behavior, resulting in Amazon losing meaningful market share).
Whether new companies can pose a challenge to Amazon would hinge upon how you view Amazon's competitive advantage. If one believes that Amazon's only real advantage is size, extending accounts payables, and low margins, perhaps you are right. On the other hand, if Amazon's advantage stems from ruthlessly efficient operations, mastery of the supply chain, ability to leverage technology to penetrate new markets, and create a one-stop customer ecosystem, then it will be hard to replicate Amazon's success.
It would need to be scandal of EPIC proportions to have a meaningful impact. Highly unlikely.
I don't think the analogies to the other companies quite holds here. Many of those firms engaged in funny accounting and/or engaged in opaque financial activities understood by few due to their complexity. There is no such mystery with Amazon. Its financials are and business models are fairly transparent. Unlike the tech companies you mention, Amazon is not a passing fad with weak revenue growth, unstable cash flows, and a temporary customer base. Amazon has become a part of our daily lives in many ways, much like how Google is used on a daily basis. Unlike Google though, Amazon does not derive the vast majority of its revenue from a single source (87% of Google's revenues in FY 2016 were from ads).
US regulators getting their heads out of their rears realizing that the majority of Amazon's operation is Anti-Trust and will be used to cripple consumers eventually.
AWS could be completely worthless with blockchain projects like Siacoin and Filecoin.
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