AMZN Q4/YoY: sales way up; may raise Prime price
I always find the Amazon financials interesting, and this was no exception.
Looking at Year over Year (YoY…comparing 2013 to 2012), Amazon says
“Net sales increased 22% to $74.45 billion, compared with $61.09 billion in 2012. Excluding the $1.28 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 24% compared with 2012.”
22%! That’s amazing!
Income was also way up, cash flow was up, and so on…this is a shining report!
During the call, they mentioned that Prime has been $79 a year since its introduction about nine years ago. Shipping costs have greatly increased…but the price hasn’t.
They said they are looking at increasing the annual price of Prime $20 to $40.
You can hear the recording at
The Q&A (Question and Answer) part of the call is the part I most like to hear…and this time, the vast majority of questions were about the possible Prime increase.
Prime appears to make Amazon a lot of money (through increased sales and loyalty)…why would they risk changing it?
First, I think they are right if they think this won’t lose them a lot of Prime members. Make it $99 a year, and we’d certainly still do it. They could do that (as was suggested by a caller) by making it an installment plan (maybe $25 a quarter). They could also tier the services: allow you to buy the shipping, Prime Video, and KOLL (Kindle Owners’ Lending Library) separately.
Second, this could be a big chunk of change…and quickly, over the course of a year.
They reportedly have tens of millions of Prime customers. They may not all be full price members, but let’s just say there are ten million, to be very conservative.
Ten million people paying $20 more in a year is a $200 million difference…Amazon could do some very interesting things with an influx of cash like that, even if part of it offsets previous expenses for Amazon for Prime.
The day’s change for Amazon stock? Up 18.81, 4.9%…
Well, you know Wall Street…at least, you may know it better than me. 😉
In after hours trading, the stock was “tanking”, according to this
You see, although they did really well, they didn’t meet “expectations”. Is that Amazon’s fault…or the fault of the people whose expectations were too high? 😉
Again, interesting stuff…feel free to comment.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.