Amazon Rules The E-tailing Jungle

Discussion
Jan 28, 2004
George Anderson

By George Anderson

Jeff Bezos’ decision to pursue growth before profits since opening Amazon.com in 1994 has brought the e-tailer criticism in the past but appears to have finally paid off as the company announced its first annual profit yesterday.

Amazon posted income of $35 million compared to a loss of $149 million in the previous year.

Some expressed concern that Amazon’s profits were not higher, considering the company had a sales increase of 36 percent to $1.9 billion. Amazon’s decision to cut prices on goods and continue its free shipping policy are said to be the factors limiting profits.

Moderator’s Comment: Do you agree with analysts who
criticize Amazon for sacrificing profits to drive sales and gain market share?

Jeff Bezos’ decision to pursue growth over profits now appears prescient with Amazon’s latest results. We’re not going to start betting against Mr. Bezos
and company at this point. Lower prices on top of Amazon’s excellent service sounds like a winning combination to us.
George
Anderson – Moderator

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