> I wouldn't expect Amazon to earn high margins as they are, in effect,
> a very large retailer. Retail margins are low so volume has to be
Whole Foods is another large retailer and has operating margins of
6.44%. COH is a large retailer with operating margins of 31.22%. TIF
has margins are 19.43%. Yum Brands (Kentucky Fried Chicken, Pizza Hut,
Taco Bell) is a large retailer and has margins of 16.25%. McDonalds is
a large retailer and they have operating margins of 30.29%. Macy's is
a large retailer and has margins of 9.35%. TJX (TJ Maxx, Marshalls) is
a big retailer with 11.68% operating margins. CVS (drugstore), which
has twice the revenue of Amazon has operating margins of 5.73%. WalMart
has 9 times Amazon's revenue and an operating margin of 5.94%.
> Of course, you don't want to be working at a company which falls
> into the old joke that "they lose money on every item but make it up
> in volume". Amazon sells the kindle using the same marketing
> strategy popularized with ink jet printers - - sell the printers at
> or below cost and make all the profit on the ink.
"Whitman also noted that printing was one area that was going through
some secular changes and macroeconomic challenges. Weaker consumer
demand is one factor, as consumers are doing less printing at home,
especially of photos. Some likely culprits are smartphones, iPads and
Facebook, where people now show off their latest baby or vacation
photos." H-P?s big problem? Hardly anyone prints any more - MarketWatch
> It's not clear yet whether Kindle users are buying enough books,
> movies or other on-line content for Amazon to earn sufficient profit
> using this strategy.
Amazon has come under pressure from mobile devices where there's less
space for ads compared to laptops and desktops running browsers. Doing
their own device to control the ad experience is a reasonable response
but they aren't really getting a lot in the way of marketshare.
Google's Nexus 7 has really changed the game in small tablets forcing
even Apple to respond with their own entry.
"Still, I don't see Amazon going out of business anytime soon and if
the type of work is interesting and has the potential for a long-term
boost to your qualifications then why not?"
Well, that's fine. But the question for this thread is on a comparison
between two companies. One with strong earnings and one with weak