Amazing how persistent this myth is.
Amazon has 30%+ gross margin. Profits go into capex. @asymptosis https://evonomics.com/amazon-accounting-corporate-profits-rich-peoples-income-invisible-bezos/ …pic.twitter.com/nPqfOcvvG1
Founder/CEO @ http://Stedi.com (modern EDI platform) & previously Proforged (acq by Huron Capital), future-enthusiast, occasional blogger, all-around nerd.
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Amazing how persistent this myth is.
Amazon has 30%+ gross margin. Profits go into capex. @asymptosis https://evonomics.com/amazon-accounting-corporate-profits-rich-peoples-income-invisible-bezos/ …pic.twitter.com/nPqfOcvvG1
Great response, best/most substantive yet. Thx. Thing is though...pic.twitter.com/7IFdQbFUwg
Market cap is going up disproportionately to capex...so? This has nothing to do with 'setting prices to break even' (which is false).
So it's just a coincidence that net earnings are always approximately zero?
No, that's intentional. But it has nothing to do with low prices. Amazon makes a health gross margin. It has to do with capex.
So w zero capex, earnings wd be 4-6% of revs. Calc from this, typic gross capex for general retail is more like 12%. http://www.stern.nyu.edu/~adamodar/pc/datasets/capex.xls …
this article might help http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works …
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