cmlber Posted October 7, 2017 Share Posted October 7, 2017 Pharmacy operators like Walgreens and CVS operate the pharmacy at close to break even, and they make their money on the sale of other things you stumble across as you walk to the back of the store to the pharmacy. Where are you getting that they are running the pharmacy at break-even? Link to comment Share on other sites More sharing options...
JRM Posted October 7, 2017 Share Posted October 7, 2017 From talking to a manager of a 24-hour Walgreens. Link to comment Share on other sites More sharing options...
cmlber Posted October 7, 2017 Share Posted October 7, 2017 From talking to a manager of a 24-hour Walgreens. I'm pretty sure that's just a manager that doesn't know what "profit" is... Odds are he didn't allocate 95% of the rent/utilities/taxes/etc. to "non-pharmacy". The pharmacy is definitely the bulk of the profit... Link to comment Share on other sites More sharing options...
JRM Posted October 7, 2017 Share Posted October 7, 2017 From talking to a manager of a 24-hour Walgreens. I'm pretty sure that's just a manager that doesn't know what "profit" is... Odds are he didn't allocate 95% of the rent/utilities/taxes/etc. to "non-pharmacy". The pharmacy is definitely the bulk of the profit... That's a pretty condescending comment. I've actually spoken to numerous pharmacists and people in the business. This particular conversation was talking about the irony that the pharmacy manager makes 2-3 times as much as the store manager, but the store manager is bringing in the profits. Of course, without the pharmacy there would be no store. I know pharmacists who work at Wal-Mart, Walgreens, mail order, locally owned operators, and grocery stores. I could be wrong, I typically don't invest in this area for other reasons. Link to comment Share on other sites More sharing options...
cmlber Posted October 7, 2017 Share Posted October 7, 2017 From talking to a manager of a 24-hour Walgreens. I'm pretty sure that's just a manager that doesn't know what "profit" is... Odds are he didn't allocate 95% of the rent/utilities/taxes/etc. to "non-pharmacy". The pharmacy is definitely the bulk of the profit... That's a pretty condescending comment. I've actually spoken to numerous pharmacists and people in the business. This particular conversation was talking about the irony that the pharmacy manager makes 2-3 times as much as the store manager, but the store manager is bringing in the profits. Of course, without the pharmacy there would be no store. I know pharmacists who work at Wal-Mart, Walgreens, mail order, locally owned operators, and grocery stores. I could be wrong, I typically don't invest in this area for other reasons. Sorry, didn't mean to be condescending, but there's no way that the pharmacy breaks even and they make their money selling overpriced snacks. MAYBE if you don't include the aisle of OTC drugs in "pharmacy" that's close to true, but 70-80% of the sales are pharmacy or OTC and that's probably 10% of the square footage. Hard to believe the 20-30% of sales of things you can get at 7/11 carrying 90% of the overhead is the profitable side of the business... Link to comment Share on other sites More sharing options...
JRM Posted October 7, 2017 Share Posted October 7, 2017 That's a good clarification. I mean drugs dispensed by a pharmacist. Not OTC drugs. Link to comment Share on other sites More sharing options...
Mephistopheles Posted October 7, 2017 Share Posted October 7, 2017 Honestly they should just get rid of regulations of drugs and make everything OTC. Survival of the fittest. Kill off all the opioid addicts or those who go into cardiac arrest for misreading their antiarrythmic medication labels. Sell all drugs on Amazon prime. It would make a significant dent in healthcare costs that's for sure Link to comment Share on other sites More sharing options...
KCLarkin Posted October 8, 2017 Share Posted October 8, 2017 Sorry, didn't mean to be condescending, but there's no way that the pharmacy breaks even and they make their money selling overpriced snacks. MAYBE if you don't include the aisle of OTC drugs in "pharmacy" that's close to true, but 70-80% of the sales are pharmacy or OTC and that's probably 10% of the square footage. Hard to believe the 20-30% of sales of things you can get at 7/11 carrying 90% of the overhead is the profitable side of the business... Don't want to get involved in this argument, especially on the the Amazon thread. But it is likely that you are both correct. Walgreens, in particular, is being very aggressive in selling scripts as a loss-leader to get you into their stores. The comment about 7/11 is interesting too. Many convenience stores also sell low margin gasoline to entice you into the store to buy the more profitable snacks. And the high margin products aren’t snacks or prescriptions, they are perfume and makeup. Link to comment Share on other sites More sharing options...
DooDiligence Posted October 8, 2017 Share Posted October 8, 2017 I'm surprised Amazon didn't buy Kroger. They've got the Tom Thumbs (convenience stores) some with pharmacies inside. Amazon would've gotten the grocery segment & ability to scale pharma in select Tom Thumbs presently without dispensaries. --- Who has the fattest margins? Manufacturers & payers? (Can't reproduce efforts but could negotiate some of their profits away.) How can they cut everyone in between out? (Kind of a divided we fall environment?) Link to comment Share on other sites More sharing options...
DTEJD1997 Posted October 22, 2017 Share Posted October 22, 2017 Hey all: Now I've got a real problem with AMZN... Turns out the Metro Detroit is in the running to get the 2nd AMZN headquarters. Naturally, our simple minded politicians and weak willed politicians are tripping over themselves to "woo" AMZN and are offering all SORTS of incentives and tax breaks to get them here. Have our leaders not read the stories of working condition in AMZN warehouses? The terrible conditions & stress at the corporate offices? BUT DTEJD1997, the business world is stressful, and if you can't hack it...take a hike! OK, fair enough.... BUT I am a small business owner. I sell a lot of stuff on the interwebs. AMZN will sometimes undercut me on price and return policies & such. Hard to compete with a company that doesn't have to earn a return on capital. BUT here is my real gripe. As a small business owner, I am vastly OVER TAXED, especially on land/real estate that I have put back into productive use. There are other areas that I am OVER TAXED on also....(health care, education, etc). So my elected representatives are rolling out the welcome mat to my competitor and giving them preferential treatment and tax breaks that I don't/can't get. THANKS A LOT! There is talk that AMZN is being offered $170k in tax incentives/abatements for every job that they open/bring. If I got that level of support, I could work wonders... F$%#&# THAT, if AMZN wants to compete, let them do it on a level playing field. Most of their jobs are "garbage" jobs anyway. As a tax paying small business owner, why do I have to subsidize my competitor? Link to comment Share on other sites More sharing options...
bargainman Posted October 23, 2017 Share Posted October 23, 2017 oh they have been playing this game for a long time, remember the whole "we won't collect state taxes even though we saw many many products in your state" fiasco? which is why I certainly wouldn't want them in my town. Link to comment Share on other sites More sharing options...
Liberty Posted October 23, 2017 Share Posted October 23, 2017 oh they have been playing this game for a long time, remember the whole "we won't collect state taxes even though we saw many many products in your state" fiasco? which is why I certainly wouldn't want them in my town. They didn't have to collect state taxes in states where they had no physical operations, like all other mail and internet retailers. It's similar to how if I buy something from the US and have it shipped here in Canada, I don't have to pay US federal and state taxes on that thing, and vice versa for an American getting something shipped from Canada. Makes sense to me. But over time Amazon has built warehouses and fulfilment centers in most states, so regardless of any law changes, it wouldn't apply anymore anyway. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted October 23, 2017 Share Posted October 23, 2017 Hey all: I almost forgot that the simple minded and weak willed bureaucrats have also caved into AMZN and given them special treatments and discounts with the post office in the USA. Once again, I ship quite a bit through the USPS and AMZN gets preferential treatment & discounted rates EVEN when taking account their volume of shipments.... If you are interested, point your browser to: https://www.wsj.com/articles/why-the-post-office-gives-amazon-special-delivery-1499987531 Link to comment Share on other sites More sharing options...
dyow Posted October 25, 2017 Share Posted October 25, 2017 This is the dangerous growth stock Ben Graham warned us about in the intelligent investor. Link to comment Share on other sites More sharing options...
rkbabang Posted October 25, 2017 Share Posted October 25, 2017 Big box retailers are hitting Amazon with restrictions on Whole Foods "Across the United States, large retailers including Target, Bed Bath & Beyond and Best Buy have legal rights in many lease agreements that allow them to limit what Amazon can do with nearby Whole Foods stores, and where it can open new ones" Link to comment Share on other sites More sharing options...
UK Posted October 26, 2017 Share Posted October 26, 2017 https://www.wsj.com/articles/wal-mart-takes-aim-at-amazon-1508811540 Link to comment Share on other sites More sharing options...
Liberty Posted October 26, 2017 Share Posted October 26, 2017 http://www.stltoday.com/business/local/amazon-gains-wholesale-pharmacy-licenses-in-multiple-states/article_4e77a39f-e644-5c22-b5e6-e613a9ed2512.html Amazon gains wholesale pharmacy licenses in multiple states Link to comment Share on other sites More sharing options...
DooDiligence Posted October 27, 2017 Share Posted October 27, 2017 http://www.stltoday.com/business/local/amazon-gains-wholesale-pharmacy-licenses-in-multiple-states/article_4e77a39f-e644-5c22-b5e6-e613a9ed2512.html Amazon gains wholesale pharmacy licenses in multiple states They should've bought Kroger (the Tom Thumbs would've given them a nice footprint for this.) ---edit--- Oh wait, that's "wholesale" pharma? Link to comment Share on other sites More sharing options...
Liberty Posted October 28, 2017 Share Posted October 28, 2017 Just for fun, a 1997 buy recommendation for Amazon: https://www.fool.com/archive/portfolios/rulebreaker/trades/1997/09/08/the-rule-breaker-portfolio-buy-amzn-september-08.aspx Split adjusted, the cost then was $3.21 Link to comment Share on other sites More sharing options...
saltybit Posted October 28, 2017 Share Posted October 28, 2017 https://digiday.com/marketing/amazon-now-1-billion-ad-business/ Amazon now has a $1 billion ad business Link to comment Share on other sites More sharing options...
Guest Cameron Posted November 2, 2017 Share Posted November 2, 2017 I know capital leases have been discussed in regards to the cash flow statement on this thread, but has anyone looked at the $117 billion in commitments and contingencies? Are those capital leases for the computers property of Amazon after the lease is up? Link to comment Share on other sites More sharing options...
DTEJD1997 Posted November 2, 2017 Share Posted November 2, 2017 Hey all: I was on a long drive the other day and wound up listening to some NPR... They were discussing AZMN, and 95% of the discussion was simple rehashing of OMG, AMZN is so bigly....and on and on. HOWEVER, they did bring up an interesting point. In addition to local municipalities giving AMZN huge tax breaks for the 2nd HQ, AMZN pays relatively little in terms of corporate (income) taxes. For example, the show said that WMT paid about 30X more in corporate taxes since 2008. They also went to postulate that this is likely to continue, as one of AMZN's strategies is to NOT make profits. At some level this makes running society difficult, as government is not getting much in terms of taxes. Something interesting to think about! Link to comment Share on other sites More sharing options...
Liberty Posted November 2, 2017 Share Posted November 2, 2017 AMZN pays relatively little in terms of corporate (income) taxes. For example, the show said that WMT paid about 30X more in corporate taxes since 2008. Breaking news: Taxes are paid on profits. If you don't make much profits, you don't pay much taxes! Now for the weather... btw, it would be interesting to see if WMT paid much taxes during it's hyper-growth phase, when they were constantly investing their cashflow in opening lots of new stores. The government doesn't really lose, it's just deferred. If you have good reinvestment opportunities that help you grow much faster, you might not pay as much tax now, but you'll be much bigger later, so when you do ease off the gas and turn on the profit tap, the government will likely get much bigger absolute numbers of tax dollars than if you had shown profits much earlier and foregone growth opportunities. This makes sense as long as the growth gives good ROIC. Otherwise, it'll be customers and vendors capturing most of the value, not the corporation or the government... Link to comment Share on other sites More sharing options...
LC Posted November 2, 2017 Share Posted November 2, 2017 And as long as current tax laws remain in force. Aggressively reinvest, build a huge empire, 'lobby' the government to change their tax laws. Link to comment Share on other sites More sharing options...
Liberty Posted November 2, 2017 Share Posted November 2, 2017 And as long as current tax laws remain in force. Aggressively reinvest, build a huge empire, 'lobby' the government to change their tax laws. Changed to what? Taxing revenues? Link to comment Share on other sites More sharing options...
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