Is Amazon a Fad?

1) fundamentally, the idea of Amazon's business can be replicated by eBay, by Walmart, by Alibaba,... potentially by anyone.

2) Amazon hasn't come up with an unique million dollar idea.

2.1) Amazon kindle is a failure

2.2) Amazon's space travel service can't compete with Tesla (fundamentally, Amazon doesn't have the technical know how people to do it. Amazon is rather a pretender than a contender.

2.3) Amazon's AWS hosting service can't compete with Oracle, Microsoft, Google. Amazon doesn't have the in house technologies in order to complete toe to toe with the big boys over the long term. They'll use their technologies and licensing edge to cause AMZN's AWS would cost more.

3) Amazon Prime (Video service) is late comer. it can't compete with Netflix.

Bottomline, Amazon stock is a fad! the company doesn't have the original proprietary technologies to carve a niche for itself. Many of its businesses are replicable!

 

Would you call Sears a fad too? A behemoth with a presence dies a slow death. They have ample resources to market, a loyal customer base with an original idea to maintain it (remember, prime dovetails with Netflix, not competes...and with prime they generate loyalty through free shipping), and they have brand recognition. Muscling your way in their market share would require very substantial resources.

That said, I think they're overvalued and primed (get it?) for a drop.

 

Nah, it's here to stay. Alibaba is it's main rival I'd say and Amazon beats it in speed, quality of products offered and overall ease of use. Amazon FBA is an awesome idea, last I read AWS was near top among competitors. It seems to me like management knows what they're doing at the company. You're right, eBay should have been able to compete, but they'd rather increase fees to turn a buck. Amazon continuously keeps innovating IMO.

I still think Walmart can take a big chunk of that market (their online platform is not that terrible); but their free shipping still means you gotta go to the store.

 

They could have a van or 2 per store and delivery guys, depends on demand. Then they could be an Amazon killer. Amazon is here to say, it isn't a fad, but it is hugely overvalued....

 

Between Amazon and Fresh Direct, I literally have not done any physical shopping in over two years. I'd imagine there are plenty of people like that.

 

AWS wouldn't stay on top for long. pretty soon MSFT, ORCL are going to eat AMZN 's lunch. they will use their in house technologies to outcompete with Amazon AWS. AMZN will force to pay premium for the technologies. AMZN is not going to invest million of dollars to re-invent the wheel (the IT technologies).
there's no uniqueness about AMZN business. it seems almost everyone could replicate. I think Sears and Target, JP Penney have been managed by dinosaurs.

beerntrading - I read a article a long time ago. it featured a guy who day traded drunk. believe it or not he made money [being drunk made him fearless]. If I have time I'll look it up for you.

 

1) While I'm by no means an expert in retail or logistics, to compare eBay to Amazon on retail is silly. eBay may have a popular market place, but Amazon has so much invested in determining user behavior, predicting what they want to buy, automatically moving products between warehouses based on predictions on purchase patterns. Amazon's retail business cannot be easily replicated by their competitors because their competitors lack the massive amount of raw data on user behaviors that Amazon has and uses extensively in their data mining operations. Furthermore, Amazon's success as a retailer is also highly attributed to their distribution system. Ebay doesn't have anything even remotely close to this. I'd say Walmart could have destroyed Amazon's retail business 10 years ago by leveraging their distribution system (which is probably the only company that can compete with Amazon in that respect), but they really dropped the ball on that. They still probably have a more robust logistics system than Amazon, but Amazon has a massive customer loyalty. Walmart does not. No other company has the customer loyalty, distribution system, and data mining operation that Amazon has. That's not to say no one can ever compete with them, but they absolutely have an advantage that will not easily be overcome.

2.1) You're probably right. I don't know much about the book / kindle side of things.

2.2) I think their space travel is more a marketing gimmick than a serious endeavor.

2.3) This in an area that I actually have quite a bit of knowledge in. I extensively use AWS and have used Azure (Microsoft's cloud platform) as well (I actually have 1 site on Azure at the moment that I'm responsible for -- not my choice).

Azure is garbage compared to AWS. The idea that Amazon can't compete in the cloud hosting business is ridiculous. Amazon practically invented cloud hosting as we know it today and they consistently offer new products and services through AWS that their competitors are years away from implementing. AWS is by far the leader in the cloud business. Take a look at the various features of AWS and then compare it to those companies you think they can't compete with. Azure is a joke compared to AWS in terms of features, ease of use, performance, cost, everything. Having said all of that, my only experiences are with Microsoft's Azure, Amazon's AWS, and a few smaller/lesser known companies. I have not used Google's cloud platform and Oracle's I can't seem to find any reason to even give it a serious consideration.

I don't think you have a grasp on the scope of what AWS is and how extensively it is used. Hell, even Netflix uses AWS.

3) The video service is what it is. It's a part of a basket of features that you get with prime membership. None of the included features are great on their own, but the little bit here, little bit there, helps to make people justify the cost of prime and once they have prime, they're more likely to make purchases from Amazon compared to if they didn't have prime. This is the purpose of the service. To create more loyalty, which creates more sales. So the video service in itself is only a piece of the overall strategy. That said, the only paid TV service I have is Amazon Prime and it's plenty for my needs. Between that and Youtube, my kids don't run out of stuff to watch either. I don't have cable, satelite, or any other streaming service, but I'm not big on watching tv or movies either. I wonder what percentage of Netflix subscribers also have prime.

Is Amazon a fad? Everything comes to an end and one day Amazon will also fail, so what constitutes a fad? More importantly, is their stock overvalued? I haven't the slightest clue. What I do know is that Amazon has a massive amount of proprietary technology (and just as importantly, proprietary data), but you've just not bothered to research it.

 

Alexa will be a billion plus business. They have also done one thing extremely well - create wealth. An original 100 shares bought at the IPO or even later as it sold off from the IPO is worth $1,090,000 today.

The rocket business isn't owned by Amazon - Bezos own that and The Washington Post.

The initial raise of a million dollars was $50,000 from Bezos and the nineteen investors each got 50,000 pre IPO shares for $50,000. That's 600,000 shares if they are still holding.

If the tax law changes and estate taxes go away I'd bet some of that will make it's way into the marketplace.

 

Sorry but I think you're misinformed. If you think anyone can replicate parallel computing banks and tailor to SW companies whose customers run simulation/rendering programs from said cloud you're high. Just look at Adobe, it's just climbing to the top; not in small part due to their cloud.