OT Amazon again

It still comes as a big surprise to most people that Amazon never posts profits.* Any recent profit they've shown is a result of their Web Services. Basically Bezos's philosophy is to invest any surplus cash in new infrastructure, acquisitions and keeping low prices by cutting margins to the bone. Apparently Bezos really does believe this and that the customer must always come first. In this way, Amazons' revenue and turnover grows astronomically year on year. Although as was pointed out on the first ever Dragon's Den - turnover doesn't equal profit. As it seems to be generally understood, the reason the share price keeps going up is on the basis that if the worst comes to the worst, give Amazons low borrowings the assets and goodwill of the business exceed the share capital by a wide margin - even at the current share price. However the thought has just struck me - if all these assets - warehouses - systems and goodwill can only ever support a business which will never actually turn profit, then they're actually worth exactly zilch.

michael adams

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Reply to
michael adams
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At the moment shareholders are presumably more than happy with their stock price growth. At some point (surely not that far off?) they will turn into a "conventional" business like Apple or Microsoft. As long as they have the prices / web site / reviews / customer service that they have at the moment, I shall continue to buy from them. I imagine that in due course they will "do a Google" and start paying a bit more UK corporation tax (although of course they and their employees do pay plenty of income tax, NIC, and VAT).

I also find it interesting that through most of the 20th century, business was rather "corporate" with few of the visionaries (or robber barons, depending on your viewpoint) of the 19th and early 20th century, we are back in an age of visionaries where people like Gates, Ellison, Jobs, Musk, and Bezos really can, as individuals, make a difference to the lives of most of us in the first world.

Reply to
newshound

A lot of 'employees' in distribution may be agency workers, on limited / zero hours contracts, and kept below the hours limits that cause them (and their employer) to become liable to NI contributions and income tax.

Owain

Reply to
spuorgelgoog

Well - the land the warehouses are on are worth something absolutely.

Reply to
Tim Watts

Many companies don't own the buildings they trade from.

Reply to
alan_m

Some of Amazon's warehouses in the UK have been paid for with development grants which will have to be repaid if they are sold within a specified period.

Reply to
Peter Johnson

Well, that's interesting...

Reply to
Tim Watts

Peter Johnson scribbled

Goodman built and own the Amazon site in Swansea.

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There is no mention of public money being used in Wales. But they've done well out of the Jocks.

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Reply to
Jonno

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