AMZN - Amazon.com Inc.

[rkbabang]

Price is all that matters

 

I think this assumption is wrong. Convenience (availability of product, speed of delivery, ease of use) and habit are also large factors.

 

I think it is wrong as well.  And not just a little wrong, but way off the mark.  Read  krazeenyc's post above.  I could easily post a list as long as his or longer where Amazon has went above and beyond for me.  Contrasted with every one of the few times we've used Walmart.com it has been a disaster.

I would pay significantly more just to buy at Amazon rather than Walmart.  Convenience, shipping speed, and most of all, customer service are all more important than price.  To me anyway.

 

 

 

 

[fareastwarriors]

The gripe I have with Amazon is there are sometimes way too many selection. it's so hard to weave through everything... If I'm looking for some specific, then it's great but sometimes I type in something like I get like a million results.... Information overload man...

 

 

[ScottHall]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

[enoch01]

Price is all that matters

 

I think this assumption is wrong. Convenience (availability of product, speed of delivery, ease of use) and habit are also large factors.

 

I think it is wrong as well.  And not just a little wrong, but way off the mark.  Read  krazeenyc's post above.  I could easily post a list as long as his or longer where Amazon has went above and beyond for me.  Contrasted with every one of the few times we've used Walmart.com it has been a disaster.

I would pay significantly more just to buy at Amazon rather than Walmart.  Convenience, shipping speed, and most of all, customer service are all more important than price.  To me anyway.

 

Ditto.  Reading all the posts abut superior customer service (here and literally anywhere else Amazon is discussed) reminds me that this is the type of mindshare and advertising that you can't buy.  Amazingly they continue to surprise me to the upside in terms of customer service.

 

Never been long, never been short.  Just a very loyal customer.

[KCLarkin]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

 

Who gives a fig about the business? Is this a good investment?

 

Even ignoring the lack of anything you might call profit or free cash flow, you need to look at the history of Cisco, Nifty Fifty, etc. It is easy to be right about the prospects for a company. It is much harder, in a pari mutuel system, to outperform the market.

 

As an investment, the only real redeeming quality AMZN has is the lousy accounting numbers*. That might be enough to keep the stock out of dangerous bubble territory. But I doubt it.

 

Every dolt who has a computer or smartphone *knows* that Amazon will become the largest retailer. And AWS will dominate IT. You don't get paid for knowing the same thing as every other investor. Generally, you pay for the opportunity to invest in the "sure things".

 

---

sorry, for this rant. This is not really targeted at AMZN, but rather the lazy thinking this stock attracts (both on the bull and bear side).

 

* Actually, the best explanation for why the stock *might* be misunderstood is the astute use of negative working capital, capital leases, and SBC to fund growth investments. That is the story that attracts me to AMZN.

[dwy000]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

Who is claiming the business is unsustainable?  It's obviously sustainable, it has over $80bn in revenues.  I think the discrepancy being discussed is whether that's enough to make it a good investment. 

 

It's a great product for consumers.  Fantastic.  Everybody loves it.  But a lot of the reasons it is so beloved as a product are the same thing that means it hasn't generated any real cash flow.  The question is whether it can actually become a real cash generating business (which it will have to someday) without giving up all those reasons it has been successful in attracting users to date.

[ScottHall]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

 

Who gives a fig about the business? Is this a good investment?

 

Even ignoring the lack of anything you might call profit or free cash flow, you need to look at the history of Cisco, Nifty Fifty, etc. It is easy to be right about the prospects for a company. It is much harder, in a pari mutuel system, to outperform the market.

 

As an investment, the only real redeeming quality AMZN has is the lousy accounting numbers*. That might be enough to keep the stock out of dangerous bubble territory. But I doubt it.

 

Every dolt who has a computer or smartphone *knows* that Amazon will become the largest retailer. And AWS will dominate IT. You don't get paid for knowing the same thing as every other investor. Generally, you pay for the opportunity to invest in the "sure things".

 

---

sorry, for this rant. This is not really targeted at AMZN, but rather the lazy thinking this stock attracts (both on the bull and bear side).

 

* Actually, the best explanation for why the stock *might* be misunderstood is the astute use of negative working capital, capital leases, and SBC to fund growth investments. That is the story that attracts me to AMZN.

 

k thx

[ScottHall]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

Who is claiming the business is unsustainable?  It's obviously sustainable, it has over $80bn in revenues.  I think the discrepancy being discussed is whether that's enough to make it a good investment. 

 

It's a great product for consumers.  Fantastic.  Everybody loves it.  But a lot of the reasons it is so beloved as a product are the same thing that means it hasn't generated any real cash flow.  The question is whether it can actually become a real cash generating business (which it will have to someday) without giving up all those reasons it has been successful in attracting users to date.

 

http://bfy.tw/32p1

[jschembs]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

 

Don't conflate gripes over accounting with concerns over business model.

[merkhet]

I hope Amazon is still not reporting GAAP profits when it becomes the largest retailer in the world by sales volume. Can't wait to hear how unsustainable of a business it is when that happens.

 

Don't conflate gripes over accounting with concerns over business model.

 

I don't think you guys are in disagreement.

[cmlber]

Also, how hard would it have been for the cart manufacturers to replicate what Ford et al were doing? Versus... how hard it is for retailers like WMT, TGT with huge, efficient supply chains to build out an effective web presence? Sorry, but I don't see a similar barrier here.

 

So...what's stopped them so far?

 

Maybe they just don't want to spend $20 billion replicating something that doesn't make any money?

 

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

[TheAiGuy]

Also, how hard would it have been for the cart manufacturers to replicate what Ford et al were doing? Versus... how hard it is for retailers like WMT, TGT with huge, efficient supply chains to build out an effective web presence? Sorry, but I don't see a similar barrier here.

 

So...what's stopped them so far?

 

Maybe they just don't want to spend $20 billion replicating something that doesn't make any money?

 

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

 

That's insane. Of course Walmart wants to recreate what Amazon has. Article from 2012 (30 seconds of Googling):

 

“Amazon is always in our sights,” says Jeremy King, chief technology officer at the retailer’s @ WalmartLabs skunkworks in Silicon Valley. “My biggest issue is playing a catch-up game.”

 

In the last year Wal-Mart has increased its investment in its online business. The company has spent more than $300 million acquiring five tech firms since May and hired more than 300 engineers and code writers in the U.S. and India. Wal-Mart is also launching a program to allow the 20 percent of its customers without credit cards or bank accounts to make online purchases.

 

http://www.bloomberg.com/bw/articles/2012-03-29/why-wal-mart-is-worried-about-amazon

 

that was three years ago. Walmart knows that Amazon is a material threat and has been trying to build out its own competitor for years, without a ton of success. I look at job postings for data scientists + software developers from time to time and Walmart is always hiring. Walmart *can't* build Amazon, and if they could, they would have. Maybe they can't because it would destroy their own profitability, a la Disruption but that doesn't mean the barrier isn't there.

[actuary]

Perhaps this is lazy thinking...

 

If we assume AMZN will reinvest everything in growth, return nothing to shareholders, and thereby achieve 20%/yr rev growth over the next 20 years...

 

Then at that point AMZN revs would be something like 8-10% of US GDP.

 

Anyway, if we assume that and let owner earnings settle at 3%, put at 20x multiple on it...

 

Then looks like a ~12% CAGR for me on the current EV. I guess the stock does worse with all the dilution.

 

Wow. What is the assumed outcome for someone willing to buy or hold at the current valuation?

 

Clearly there is disagreement in the thread about SWOT for the AMZN business model. But we should all be able to agree it is not hard to picture a scenario less rosy than the one above. Hard for me to see the maximum likelihood or median outcomes better than that one.

[Palantir]

 

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

 

Could MSFT replicate the iPhone and compete with AAPL? Could GOOG spend billions and replicate FB? Could SHLD replicate BRKhahaha....

 

I believe there is no chance WMT could replicate a competitive position in their web presence. I think you are highly overrating WMT here.

[rkbabang]

 

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

 

Could MSFT replicate the iPhone and compete with AAPL? Could GOOG spend billions and replicate FB? Could SHLD replicate BRKhahaha....

 

I believe there is no chance WMT could replicate a competitive position in their web presence. I think you are highly overrating WMT here.

 

+1.  Can public schools increase their spending per student to outperform private schools?  Oh wait they already spend A LOT more.  Walmart could increase capital expenditures on its website to double what Amazon spends and it would still not be Amazon.  The same with Windows Phone vs. iPhone, the same with Google+ vs FB, the same with SHLD vs. BRK.

 

Sometimes a willingness to spend money isn't the issue at all. 

 

 

 

[valueinvestor82]

1/3 of the entire US population shops weekly at Walmart and every person in the world purchases equivalent to 1.1 purchases a year at Walmart. And somehow they won't be able to grow their online presence? Walmart has a lot higher chance than "Amazonians" will give credit to make a meaningful dent by simply appealing to more people who already shop at Walmart. I go back to what Actuary said. I don't see the math working out from here.

 

And to all of the "15 years the Bears have been wrong" comments: it took Amazon over 10 years of going nowhere (and having significant drawdowns in 2008 and even since) to get to where it went parabolic 2-3 years ago. What coincided? QE3 and continued cheap money. The credit agencies aren't as optimistic as you are, either, judging by the low rating on their debt.

[cmlber]

 

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

 

Could MSFT replicate the iPhone and compete with AAPL? Could GOOG spend billions and replicate FB? Could SHLD replicate BRKhahaha....

 

I believe there is no chance WMT could replicate a competitive position in their web presence. I think you are highly overrating WMT here.

 

+1.  Can public schools increase their spending per student to outperform private schools?  Oh wait they already spend A LOT more.  Walmart could increase capital expenditures on its website to double what Amazon spends and it would still not be Amazon.  The same with Windows Phone vs. iPhone, the same with Google+ vs FB, the same with SHLD vs. BRK.

 

Sometimes a willingness to spend money isn't the issue at all.

 

None of those examples are relevant. First, your public schools example ignores the lack of a profit motive that incentivizes better outcomes. Second, FB benefits from huge network effects. Nobody wants to be the only one on a social network, it serves no purpose. So no amount of money can replicate the network. Third, Apple benefits from the whole ecosystem creating captivity for the time being, and I'd argue that eventually, their dominance will probably disappear.

 

Without barriers to entry, high returns on capital will be competed away.

 

I think you're making a big leap in saying that since competition has not emerged, there must be barriers to entry. You don't have the critical part in the middle, "high returns on capital," to incentivize competition. 

 

If Jeff Bezos started a new company with $100 billion in cash with the sole purpose of competing with Amazon (and no plans to make money), do you think he could do it?

 

What is it about Amazon that you think Walmart couldn't replicate? The logistics is outsourced to UPS for the most part. Walmart has the same or better buying power. Land to build distribution centers is plentiful. What's the secret sauce?

[TheAiGuy]

 

Without barriers to entry, high returns on capital will be competed away.

 

I think you're making a big leap in saying that since competition has not emerged, there must be barriers to entry. You don't have the critical part in the middle, "high returns on capital," to incentivize competition. 

 

If Jeff Bezos started a new company with $100 billion in cash with the sole purpose of competing with Amazon (and no plans to make money), do you think he could do it?

 

What is it about Amazon that you think Walmart couldn't replicate? The logistics is outsourced to UPS for the most part. Walmart has the same or better buying power. Land to build distribution centers is plentiful. What's the secret sauce?

 

There are massive barriers to entry:

 

1) There is a substantial capital investment needed to economies of scale (warehouses, shipping, etc). To justify this, a large volume of units sold is needed. Developing this is a chicken and egg problem, and its difficult to see how a company could get one without the other without burning through massive (Billions) in loses to do so. This is similar to "disruption" where an incumbent can not follow a new entrant into a new line of business because to do so would destroy the incumbent's margins.

 

2) Amazon has invested substantially in intellectual capital (robotics in the warehouses, website, servers, etc) that materially improve their operational efficiency. Again, these are difficult to develop technologies that require substantial expertise and capital investment.

 

3) There are efficiencies in shipping multiple items per delivery. The idea is that as Amazon achieves more scale, people will order more things at once, and lower their cost of shipping per item marginally (anecdotally, this has happened to me).

 

4) Habit -- if people start going to Amazon for everything, they have less of an incentive to shop elsewhere.

 

5) Purchasing power -- this is one that Walmart obviously has, but as Amazon scales up, they will have grater negotiating leverage as a monopsonic buyer. Amazon has this in books and Walmart may very well loose this advantage as it is an advantage of scale (Walmart did get this big b/c it had purchasing power, it has purchasing power b/c it is this big).

 

6) Alternate products. The prime membership has alternate benefits that promote lock-in, namely Kindle and Prime video. This isn't important to everyone, but it is marginally beneficial.  Again, anecdotally, I'm starting to here more about Transparent and The Man in the High Castle, and the only way you can get those is Amazon. This benefit is similar to Costco selling gas at cost -- it keeps you coming back to the store and is a loss leader.

 

 

Yes, there will be other entrants into the market and other companies should survive, but it is willfully ignorant to assume that Amazon is on the precipice of collapse. They have substantial competitive advantages that are difficult to replicate, and previous/continuing attempts to do so have not been/do not appear to be anywhere near as successful (Quisdy, Zappos, Walmart, Overstock, Jet.com -- which is terrible, maybe it will get better?)

 

And, yeah, Bezos probably could beat Amazon.

[rukawa]

If tomorrow Walmart announced that they were going to spend $20 billion a year over the next five years to build out their web presence, do you think they wouldn't be able to compete with Amazon?

 

I doubt Walmart could replicate what Amazon has done with even $200 billion. There are all kinds of reasons but user habits, goodwill, operational experience and organization take years to build up. You can't always substitute money for time. 

[rkbabang]

Brand reputation and image has something to do with it as well.  It is the sole reason why Coke could dominate the flavored fizzy sugar water market for over a hundred years.  And Levi's the blue denim pants market.  Both brands are finally diminishing in power, but it was a long run.  Walmart, the brand, stands for cheap prices, low quality, difficult to deal with people.    I'm not even sure what Walmart could do to repair its brand to something approching Amazon.com's.  It would be cheaper and take less time to create a new brand for its online presence. 

 

I'm not saying brand is everything, that is just one of the many reasons.  Could Jeff Bezos with a large enough cash hoard beat Amazon.com, I'd say probably.  He has the experience and know how to do it, and if this were to happen Amazon.com would no longer be run by Jeff Bezos.

 

[KCLarkin]

 

Without barriers to entry, high returns on capital will be competed away.

 

I think you're making a big leap in saying that since competition has not emerged, there must be barriers to entry. You don't have the critical part in the middle, "high returns on capital," to incentivize competition. 

 

If Jeff Bezos started a new company with $100 billion in cash with the sole purpose of competing with Amazon (and no plans to make money), do you think he could do it?

 

What is it about Amazon that you think Walmart couldn't replicate? The logistics is outsourced to UPS for the most part. Walmart has the same or better buying power. Land to build distribution centers is plentiful. What's the secret sauce?

 

There are massive barriers to entry:

 

1) There is a substantial capital investment needed to economies of scale (warehouses, shipping, etc). To justify this, a large volume of units sold is needed. Developing this is a chicken and egg problem, and its difficult to see how a company could get one without the other without burning through massive (Billions) in loses to do so. This is similar to "disruption" where an incumbent can not follow a new entrant into a new line of business because to do so would destroy the incumbent's margins.

 

2) Amazon has invested substantially in intellectual capital (robotics in the warehouses, website, servers, etc) that materially improve their operational efficiency. Again, these are difficult to develop technologies that require substantial expertise and capital investment.

 

3) There are efficiencies in shipping multiple items per delivery. The idea is that as Amazon achieves more scale, people will order more things at once, and lower their cost of shipping per item marginally (anecdotally, this has happened to me).

 

4) Habit -- if people start going to Amazon for everything, they have less of an incentive to shop elsewhere.

 

5) Purchasing power -- this is one that Walmart obviously has, but as Amazon scales up, they will have grater negotiating leverage as a monopsonic buyer. Amazon has this in books and Walmart may very well loose this advantage as it is an advantage of scale (Walmart did get this big b/c it had purchasing power, it has purchasing power b/c it is this big).

 

6) Alternate products. The prime membership has alternate benefits that promote lock-in, namely Kindle and Prime video. This isn't important to everyone, but it is marginally beneficial.  Again, anecdotally, I'm starting to here more about Transparent and The Man in the High Castle, and the only way you can get those is Amazon. This benefit is similar to Costco selling gas at cost -- it keeps you coming back to the store and is a loss leader.

 

 

Yes, there will be other entrants into the market and other companies should survive, but it is willfully ignorant to assume that Amazon is on the precipice of collapse. They have substantial competitive advantages that are difficult to replicate, and previous/continuing attempts to do so have not been/do not appear to be anywhere near as successful (Quisdy, Zappos, Walmart, Overstock, Jet.com -- which is terrible, maybe it will get better?)

 

And, yeah, Bezos probably could beat Amazon.

 

Good analysis.

 

My thoughts: most of those barriers are overcome with sufficient capital. In other words, the moat is not that wide but the lack of compelling economics discourage entry. Which, I think, is the bull case. If Amazon operates at break-even for long enough, eventually the moat will be wide enough that they can stop competing so hard and earn good returns on capital.

 

Quidsi is a good example of this. They were succeeding. Then Amazon entered into a price war which forced Quidsi to sell out. Quidsi just didn't have enough capital to survive the price-war.

 

Still, retail is not a natural monopoly. Perhaps, we just can't see the future shift in competition. The people paying 50x for Walmart in 1999 would be very surprised to learn how vulnerable the company became after only 15 years.

 

 

 

 

 

 

[cmlber]

 

There are massive barriers to entry:

 

1) There is a substantial capital investment needed to economies of scale (warehouses, shipping, etc). To justify this, a large volume of units sold is needed. Developing this is a chicken and egg problem, and its difficult to see how a company could get one without the other without burning through massive (Billions) in loses to do so. This is similar to "disruption" where an incumbent can not follow a new entrant into a new line of business because to do so would destroy the incumbent's margins.

 

 

Capital is not a barrier to entry, ask General Motors. It’s a barrier to me entering, but it is not a barrier to Walmart entering. Walmart could replicate the entire physical infrastructure of Amazon with $20 billion (this is not a guess, it’s straight from the PPE line on Amazon’s balance sheet).  That’s about 16 quarters of free cash flow for Walmart.  Walmart could also spend $7 billion a year (2x Cokes ad budget) making sure everyone in the country knows how much better Walmart is and how much lower its prices are.

 

 

2) Amazon has invested substantially in intellectual capital (robotics in the warehouses, website, servers, etc) that materially improve their operational efficiency. Again, these are difficult to develop technologies that require substantial expertise and capital investment.

 

 

They bought Kiva which builds the robots for $775 million in 2012.  Do you think Walmart can’t do what the guys at Kiva did with $100 billion?  Maybe there is some patented technology that I don’t know about, but if there was, Amazon would probably be making money now.

 

 

3) There are efficiencies in shipping multiple items per delivery. The idea is that as Amazon achieves more scale, people will order more things at once, and lower their cost of shipping per item marginally (anecdotally, this has happened to me).

 

 

This one doesn’t make sense to me.  Amazon being bigger shouldn’t impact how much I order from Amazon per cart.

 

 

4) Habit -- if people start going to Amazon for everything, they have less of an incentive to shop elsewhere.

 

 

This is the only one I’ll give you.  There certainly is some habit value, but how much?  $20 billion? $50 billion? $100 billion? $200 billion? $500 billion?

 

 

5) Purchasing power -- this is one that Walmart obviously has, but as Amazon scales up, they will have grater negotiating leverage as a monopsonic buyer. Amazon has this in books and Walmart may very well loose this advantage as it is an advantage of scale (Walmart did get this big b/c it had purchasing power, it has purchasing power b/c it is this big).

 

 

Walmart wins here.

 

 

6) Alternate products. The prime membership has alternate benefits that promote lock-in, namely Kindle and Prime video. This isn't important to everyone, but it is marginally beneficial.  Again, anecdotally, I'm starting to here more about Transparent and The Man in the High Castle, and the only way you can get those is Amazon. This benefit is similar to Costco selling gas at cost -- it keeps you coming back to the store and is a loss leader.

 

 

Walmart can replicate this with a 15 minute phone call to Reed Hastings. “Hey Reed, we want to offer a Prime video with our new Prime offering, can we just partner with Netflix and offer all of our members free Netflix and we’ll pay you $80/year.” “Sure.” Bam.  Walmart has the same loss leader except with better content.

 

I use Amazon for all my shopping pretty much, so I understand it’s a great service. But the point is, at $314 billion, is that priced in?

 

It's possible that Amazon could make entering the business so unattractive for long enough that it eventually develops a real moat, but I think that's likely.

 

[rkbabang]

retail is not a natural monopoly. Perhaps, we just can't see the future shift in competition. The people paying 50x for Walmart in 1999 would be very surprised to learn how vulnerable the company became after only 15 years.

 

This is why I've never bought Amazon.  Retailers can not stay on top forever.  You can't predict what will happen in retail in the future, even though I suspect Amazon.com has a long run ahead of it.  Sears was top of the food chain for a long time, Walmart was as well, but less long than Sears and it will eventually be what Sears is today.  I think Amazon.com will have a long run, but less long than Walmart.  Some company will take them it out eventually, but I'd be shocked if that eventual threat to Amazon came from Walmart.  It will be from a direction we can't anticipate right now with a new business model that Amazon will scramble to copy and fail.

[cmlber]

Brand reputation and image has something to do with it as well.  It is the sole reason why Coke could dominate the flavored fizzy sugar water market for over a hundred years.  And Levi's the blue denim pants market.  Both brands are finally diminishing in power, but it was a long run.  Walmart, the brand, stands for cheap prices, low quality, difficult to deal with people.    I'm not even sure what Walmart could do to repair its brand to something approching Amazon.com's.  It would be cheaper and take less time to create a new brand for its online presence. 

 

I'm not saying brand is everything, that is just one of the many reasons.  Could Jeff Bezos with a large enough cash hoard beat Amazon.com, I'd say probably.  He has the experience and know how to do it, and if this were to happen Amazon.com would no longer be run by Jeff Bezos.

 

How did the Sear's brand do for them?  Or the Kmart brand?  Walmart's success has nothing to do with brand, it's a cost advantage that leads to lower prices.  Point to a mass market retailer that has sustained dominance over time because of brand.

 

I can point to hundreds of consumer products brands.  For whatever reason, people want a specific brand of sugar in their mouth or soap in their shower, but don't seem to care from which retailer they buy those brands.

 

Edit: Just saw subsequent post, so I guess we're in agreement.

[rkbabang]

Brand reputation and image has something to do with it as well.  It is the sole reason why Coke could dominate the flavored fizzy sugar water market for over a hundred years.  And Levi's the blue denim pants market.  Both brands are finally diminishing in power, but it was a long run.  Walmart, the brand, stands for cheap prices, low quality, difficult to deal with people.    I'm not even sure what Walmart could do to repair its brand to something approching Amazon.com's.  It would be cheaper and take less time to create a new brand for its online presence. 

 

I'm not saying brand is everything, that is just one of the many reasons.  Could Jeff Bezos with a large enough cash hoard beat Amazon.com, I'd say probably.  He has the experience and know how to do it, and if this were to happen Amazon.com would no longer be run by Jeff Bezos.

 

How did the Sear's brand do for them?  Or the Kmart brand?  Walmart's success has nothing to do with brand, it's a cost advantage that leads to lower prices.  Point to a mass market retailer that has sustained dominance over time because of brand.

 

I can point to hundreds of consumer products brands.  For whatever reason, people want a specific brand of sugar in their mouth or soap in their shower, but don't seem to care from which retailer they buy those brands.

 

Edit: Just saw subsequent post, so I guess we're in agreement.

 

Yes I think we are mostly in agreement.  My point is that you can't out-Amazon Amazon by spending a little more money.  Jeff Bezos could not have easily built supercenters all across the country to compete with Walmart.  If you try to copy Amazon with lower prices, you are not likely to succeed.  Amazon is firing on all cylinders right now, imitators are likely to leave out an important part of the formula. And Amazon.com is the online shopping brand.  Whatever company eventually becomes dominant in retail surpassing Amazon.com will not be a copy of Amazon, it will be something else.  I can't tell you what that "something else" is, because if I knew I'd be doing it.  It will probably be something enabled by some new technology we don't have yet.