Why aren’t more companies like Amazon?
Amazon just announced they’ll begin to deliver groceries to homes across America. If you know your history you know that Grocery Gateway, one of the biggest busts of the Dotcom Period, had an entire business model centred around delivering groceries to your home. The difference is that Amazon will succeed and everyone in the Grocery industry knows it. The business like a few other Amazon verticals will be a money drain, but it will still be considered a success for them.
Many articles have been written about how Apple never loses money, how Microsoft is a cash cow, and how high Google’s margins are. Yet there are also articles that believe those same companies have stalled or are looking ever more vulnerable. Nobody is challenging Amazon in e-commerce. Nobody.
Amazon’s stock market success is predicated on the fact that they never stop spending money to beat back the competition. Traders who will short a stock and destroy its value on a whim love Amazon.
They never enter a market they can’t compete in, and they keep entering new markets all the time. Their revenue strategy is to keep spending money to generate more revenue, hoarding money is not an option. They are running a zero sum, revenue splurging, ever-evolving machine for which there is no parallel. So why aren’t more companies like Amazon?
James is a designer & developer @ Modu Design who spends his nights thinking up crazy ideas and watching classic films.You can find his work at www.modudesign.ca or www.mcnabj.com.
Update: Thanks to everyone who shared or recommended my post, it means a lot to me.
