This Could be Huge for AMZN Stock
Jeff Bezos, CEO of Amazon.com, Inc. (NASDAQ:AMZN), is working on a covert plan for world domination, which could take AMZN stock to new highs. Investors must pay attention, because this next move could be bigger than 3D printing, the personal computer, and even the “iPhone.”
Take note that Amazon is primarily defined as an online retailer for its core business. However, e-commerce sales, despite having witnessed exponential growth in the last decade, still make up only a small part of total retail sales at less than 10%. (Source: “Quarterly Retail E-Commerce Sales,” U.S. Census Bureau, November 17, 2015.)
What exactly has kept e-commerce from taking off? It’s time inefficiency! People continue to choose brick-and-mortar retailers over e-tailers for the speed of service, more than anything. Should you run out of eggs, Amazon could never deliver them faster than you taking a ride to your nearest Wal-Mart—or could it?
Jeff Bezos of Amazon has the answer. He’s come up with a plan that will put Amazon at the center stage in the e-commerce and retail marketplace, even ahead of the traditional retailers.
Bezos is making it possible by playing to his mantra. Putting it in his words: “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
Holding true to his words, Jeff Bezos, as Amazon’s CEO, is pioneering a new business segment that no other competitor has managed to pull off—and it could revolutionize the way this e-commerce giant does business.
Bezos Claims Land, Sea, and Sky for Amazon.com, Inc.
Amazon has taken three groundbreaking steps in the last one month, all of which suggest the company is working on building its own logistics business.
In December, Amazon bought a whole fleet of delivery trucks in the U.S. to decrease its reliance on third-party delivery companies. Later that month, we heard that the company was in talks to either lease or buy 20 Boeing jets to start its own airfreight operations.
And finally, yesterday, the latest news in is that Amazon’s China division is now licensed to offer ocean freight services. (Source: “Amazon China Can Now Manage Ocean Shipments For Other Companies,” TechCrunch, January 15, 2016.)
You see the pattern here?
Amazon is quietly building a whole network for logistics. Yes, the company is taking its Amazon Prime service to a whole new level. Up until now, the fastest delivery Amazon could offer was through its “Amazon Prime Now” service. Through this service, the company offers one-hour delivery on a specific catalog of items to a handful of locations in the U.S. Of course, this service comes at an additional fee.
Now, it seems Bezos is aiming for something bigger, better, and faster. Keep in mind that Amazon is also working on its “Prime Air” project, through which the company will be offer delivery within a half-hour using its own fleet of Amazon drones to deliver packages.
Forget the next piece of Apple iJunk. These initiatives could reshape entire industries.
The Bottom Line on AMZN Stock
Unlike traditional businesses whose primary strategic goal is profitability, Amazon’s goal is building a healthy and long-term customer relationship. Profitability then becomes an ultimate consequence.
Needless to say, Amazon owes its success to its visionary leader, who has effectively built an ecosystem of loyal customers through razor-thin margins. Amazon’s cut-throat pricing across the board for all of its services and products may hurt its bottom-line numbers, but it has also granted AMZN stock an edge over the other technology companies active in the Internet services space.