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Amazon profits down

We had a thread recently (which I can't find) about ebay profits being down where it was mentioned that Amazon continue to stay firm profit wise thus proving that Ebay are bad nasty people with no idea about business even in a recession. In the interest of fairness it is worth pointing out that Amazon has NOT made as good a profit in the last quarter as they have done previously

http://news.bbc.co.uk/1/hi/business/8166269.stm
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  • cyberbob
    cyberbob Posts: 9,480 Forumite
    1,000 Posts Combo Breaker
    That sort of defeats the argument that people put that its ebays policies that have brought there profits down and conveniently forgetting the world recession and that most peoples profits are down.

    Interesting article thanks Soolin
  • reehsetin
    reehsetin Posts: 4,916 Forumite
    1,000 Posts Combo Breaker
    not amazon has gone down hill in my eyes, 90% of listings seem to be marketplace sellers,
    Yes Your Dukeiness :D
  • MrTomato
    MrTomato Posts: 771 Forumite
    Could some of it be down to lowering the amount to be eligible for free delivery, as I'm sure they have quite a big bill?
    Although I don't know if the change happened in the last quarter.
  • soolin
    soolin Posts: 73,427 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    The free postage below £5 started in a previous quarter, lots of rumbling on seller community boards as Amazon have made as many changes to our selling practice as ebay have on their site. The continual glithches are also being blamed for poor sales generally on marketplace.
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • cyril82
    cyril82 Posts: 948 Forumite
    soolin wrote: »
    We had a thread recently (which I can't find) about ebay profits being down where it was mentioned that Amazon continue to stay firm profit wise thus proving that Ebay are bad nasty people with no idea about business even in a recession. In the interest of fairness it is worth pointing out that Amazon has NOT made as good a profit in the last quarter as they have done previously

    http://news.bbc.co.uk/1/hi/business/8166269.stm

    I think soolin you are referring to the thread in which myself and premier were discussing the comparative performance of ebay shares to amazon shares over the last 18 months or so.

    Share prices and profits are different although naturally one often affects the other, but a 10% dip while significant does not on the face of it give a full picture, comparatively over the last 18 months amazon shares, despite fluctuating quite wildly at times, have remained strong and at the time of the discussion you refer to were sitting at $94 almost exactly where they where 18 months ago compared with ebay shares sitting at $20 compared with $40 18 months ago, before most of the changes they have made to the site format. Also Ebay shares have been predominately below $20 for over a year, which is a poor performance and a prolonged drop in share price like that compared with the fluctuations of amazons shares often indicate deeper problems within the organisation, which was the point i was making, not that ebay were "evil" or whatever you said.

    one thing conveniently overlooked though by yourself is that the article states that in the same quarter last year sales were boosted by the $53million sale of it's European dvd business compared with being hit this year by having to pay toys r us $51 million.

    Given these two factors it's not such a dramatic difference.
  • soolin
    soolin Posts: 73,427 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Just seemed odd to me that was all that ebay are talked down because they can't keep up their enormous profit levels in a recession and Amazon is shown as a glorious example of how it is possible to increase profits in a recession. Yet when Amazon fall a bit the excuses come out to explain why.

    .
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • Premier_2
    Premier_2 Posts: 15,141 Forumite
    10,000 Posts Combo Breaker
    That's correct soolin. :)

    Share price movements can be misleading as they are affected by what the market thinks will happen and what then actually materialises.

    e.g. if the market thinks a company will increase profits by say 50%, the share price will already reflect that. If the company fail to match the expectation, the share price will fall.
    If another company is expected to make a huge loss, but the results show the loss not to be so big as expected, then the share price will rise.

    But which is the better company? The one that is making a profit (or bigger profit) or the one that is making a loss (or in the case of amazon less profit)?
    "Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 2010
  • cyril82
    cyril82 Posts: 948 Forumite
    soolin wrote: »
    Just seemed odd to me that was all that ebay are talked down because they can't keep up their enormous profit levels in a recession and Amazon is shown as a glorious example of how it is possible to increase profits in a recession. Yet when Amazon fall a bit the excuses come out to explain why.

    .

    nobody was discussing profit in the previous thread which appears to have inspired you to start this thread in defence of ebay whom i know you hold in very high regard and hate to hear anything negative spoken about, we were discussing share price

    Share prices generally give a deeper insight into a how a company is performing and how industry expert predict it will perform in the future, ebay shares are currently around $20 and it is the first time in 12 months that they have been that high, however they still need a massive 100% increase to get back to their high of $40, amazon share did drop last year as low as $30 dollars or there abouts but since they recovered almost instantly it would appear to have been a temporary knee jerk reaction to something happening in the market, but either way it was minor drop that did not last very long.

    Compared with ebay who have suffered a prolonged drop in share price it paints a picture and it is clear that of the two amazon is performing better as a company with steady share prices while ebay is struggling, that is no doubt down in some part to the vast changes to the site that ebay are making creating uncertainty amongst investors, not least because they have yet to prove to be a success.

    the article you posted relates to a direct comparison of amazons Profits compared to the same quarter last year and states that they are down 10% on last year to $142million compared with $158million last year in the same period, that’s a difference of $16million, but last year profits were boosted by a $53million sale of part of their group, so on that basis to make that $19million less they had to generate $35million more profit than last year, then add to that the fact they also had to pay $51 million to toys r us this quarter that means that in order to make 10% less they actually generated around $85million more profit from somewhere this year than they did last year, so all in all given those factors 10% down is pretty good going.

    Which is why shares stay high at $94 a share.
  • pelirocco
    pelirocco Posts: 8,275 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    cyril82 wrote: »
    nobody was discussing profit in the previous thread which appears to have inspired you to start this thread in defence of ebay whom i know you hold in very high regard and hate to hear anything negative spoken about, we were discussing share price

    Share prices generally give a deeper insight into a how a company is performing and how industry expert predict it will perform in the future, ebay shares are currently around $20 and it is the first time in 12 months that they have been that high, however they still need a massive 100% increase to get back to their high of $40, amazon share did drop last year as low as $30 dollars or there abouts but since they recovered almost instantly it would appear to have been a temporary knee jerk reaction to something happening in the market, but either way it was minor drop that did not last very long.

    Compared with ebay who have suffered a prolonged drop in share price it paints a picture and it is clear that of the two amazon is performing better as a company with steady share prices while ebay is struggling, that is no doubt down in some part to the vast changes to the site that ebay are making creating uncertainty amongst investors, not least because they have yet to prove to be a success.

    the article you posted relates to a direct comparison of amazons Profits compared to the same quarter last year and states that they are down 10% on last year to $142million compared with $158million last year in the same period, that’s a difference of $16million, but last year profits were boosted by a $53million sale of part of their group, so on that basis to make that $19million less they had to generate $35million more profit than last year, then add to that the fact they also had to pay $51 million to toys r us this quarter that means that in order to make 10% less they actually generated around $85million more profit from somewhere this year than they did last year, so all in all given those factors 10% down is pretty good going.

    Which is why shares stay high at $94 a share.


    very good post ,there are always underlying factors as to why companies profits show a loss and not always, as in this case , are they cause by lack of profitability , Likewise a company posting an increase in profit could be caused by other factors
    Vuja De - the feeling you'll be here later
  • pelirocco
    pelirocco Posts: 8,275 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    soolin wrote: »
    Just seemed odd to me that was all that ebay are talked down because they can't keep up their enormous profit levels in a recession and Amazon is shown as a glorious example of how it is possible to increase profits in a recession. Yet when Amazon fall a bit the excuses come out to explain why.

    .


    Thats why you shouldnt read too much into everything you read with out the knowledge to understand why
    Vuja De - the feeling you'll be here later
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