Amazon's profit-eating machine revs into overdrive Shares in e-retailer Amazon inched down over 2 per cent in after-hours trading after the company reported a net loss in its second quarter and forecast problems in its third quarter, currently underway. Amazon's great profit-eating machine was on full display on Wednesday, when the mega e-tailer's vast revenues failed to stop …
For now. It will change and by being first and the biggest when it comes to their cloud stuff it will make them a fortune.
They have produced something totally new (Kindle / AWS) more than once and made it into something worth having that everyone else has tried to copy. (Same as Apple to a point although Apple generally just refined something someone else had tried already).
Compare to Microsoft who's only real success of a new product (Xbox) cost them an absolute fortune.
"They have produced something totally new (Kindle / AWS) more than once and made it into something worth having that everyone else has tried to copy. (Same as Apple to a point although Apple generally just refined something someone else had tried already)."
Indeed.
And the biggest data flow the NSA has ever seen.
Be hard to complain about them not paying enough tax when they are not profitable.
I suspect they are spending significant amounts of money and could be profitable if it was in their interests to be.
I think they do the right thing. (Only tech company that chooses to screw over anyone other than the customer which is to be commended.)
They also don't only think about the short term but they are not being totally stupid about it. (Like the 360 and PS3 were).
They could contribute something to Xen but other than that I am not too bothered. (They annoy me far less than places like Currys / Dixons / PC World etc etc).
It could be that the UK operation is profitable and it's unrelated operations in other parts of the world that makes the loss. In this case the UK operation should still be paying corporation tax.
In addition Amazon should be paying VAT at the UK rate (20%) but instead only pays 3% as it manages to pass all its UK trade through Luxembourg and pays there instead. Of course it still charges us punters the full 20%!
Despite the headline loss, there is still a very good argument that Amazon should be paying taxes in the UK.
"Don't blame the companies, blame the governments who make the laws, or in some instances the governments who allow the EU to make laws for them."
RAther, blame the partners to the big 5 accountancy firms who advise the HMRC on their tax laws and then return to the big 5 accountancy firms on the laws they helped "advise" on on.
Can you say "conflict of interest?" Can you say "Breach of proffessional ethics?"
Amazon made losses for the first 6 or so years by cutting process so aggressively it starved the market of viable competition. They're doing the same with AWS, probably where the money is going right now, along with some nice salaries and bonuses. I don't honestly feel 'poor them' when I hear this, clearly they are making money somewhere or they'd stop trading, you can hide a lot with the right accounting.
The way you win at the Monopoly game is to buy everything you can get your hands on. You start with the cheap properties just past Go. Buy all four railroads and both utilities. Nevermind the blue and green stuff that you find on the Go side of the board.
Amazon is playing Monopoly for keeps. The only competition they have is Apple. The only publishing outlets that authors have anymore are, guess who, Amazon and Apple. So far, so good. Amazon has made it far easier for new authors to get published, but that is offset by its policies that also make it difficult for the newcomers to make money off of their writing. Apple, on the other hand, has made it very difficult for authors to get started, but once you do get onto their sites, you are in reasonably good shape because you have fairly high quality neighbors.
A lot of indie writers are doing very nicely thank you out of Amazon. So I'm not sure where you get the idea they make it hard.
Amazon certainly make it easier to make money out of writing than traditional publishing ever did.
You still need a combination of luck, determination, and the common touch to make a living wage. But it's no exaggeration to say that Kindle has completely transformed some of the genre markets, including romance, erotica, some SF&F, mystery, and so on.
Apple have better technology, but a much smaller share of the market. Book apps sell much better than iBooks do. Medium term it's not obvious that iBooks are worth the effort, even for glossy interactive projects.
I don't shop at Amazon precisely because they've rarely turned a "profit" for tax purposes, bizarrely, I've now discovered it's actually generally cheaper to buy my books elsewhere, Sainsbury's Entertainment tend to be pretty cheap plus they pay tax, have free delivery and the same pre-order guarantee as Amazon (lowest price).
Are they investing their profits or removing them through a stream of price cuts? It's pretty hard to tell from their accounting. I thought the whole point of predatory pricing legislation was to stop companies using core business to bankroll "no profit" expansion into new markets with a view to closing down the competition, how is this massive company able to keep expanding into new markets, turning over billions and reporting essentially no profit quarter after quarter without any questions asked?
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