re: #5 Destro

Amazon saw just $97 million in net profits in Q4. Yes, $97 million. That would be a big win for a company with $1 billion in revenue, but I’m probably not going out on a limb to say that it’s a red flag when you’re doing $21 billion.

Is it because they are undercutting the brick and mortar competition by undercharging for goods?

I don’t see who it is they’re undercutting. Much of Amazon’s sales now come from third parties who pay Amazon a percentage of their sales. Their prices aren’t particularly good; the key is you can’t find their items anywhere other than Amazon or other web sites. When I need specialized plumbing items, I can’t buy them at the local jobber any more; they won’t sell to me, but I can buy them through Amazon.

They sell big ticket items, but they sell them at the same price as other internet retailers. Add in that Amazon now collects sales tax in places like California and they’re actually at a disadvantage. Local businesses can compete with Amazon in CA now, if they choose to. Those that don’t are going to have trouble surviving.