How Amazon seized the pandemic and rolled the ball
A look at how Amazon capitalized on the pandemic
The coronavirus pandemic has helped a lot of companies gain the momentum they were not expecting. The vaccine developers, like AstraZeneca, whose vaccine is now being approved across the world, must have had no idea that its stock will see lightspeed in uptrends. The same goes for India's serum institute, which accounts for more than 60% of vaccine development of the global supply chain of vaccines across the globe.
Similarly, E-Commerce platforms like Amazon saw an upsurge in stocks
since everyone was locked inside their houses but still needed deliveries at
their doorsteps. The pandemic raised the need for click to shop concept, and
the sales of Bezos-owned E-commerce giant Amazon saw a double rise in May
Role of Amazon on the seller part:
The company also asks for more than $35 for every item that is listed on
the website, and apart from that. It also asks for more than 25% in revenue for
each item. This is the step that has led the company to stand in court against
millions of sellers who account for more than half of the company's sales. The
experience on the seller's end has taken a plunge during the pandemic, and
sellers are in a state where they feel that Amazon is forcing laws on them that
resemble dictatorship over the vast market that the company solely
Sales analytics with the counterparts:
The sales in consumer spending rose up to 60% in July and May, in comparison to the similar time frame in the previous year. If compared by Walmart, which has 6% of the E-Commerce market, Amazon has a massive 38% presence. But all of this was well under pressure before the world by hit by the deadly coronavirus pandemic.
But the lockdowns came in as a booster dose that increased the company's
dominance in the market and was also a relief in some sense or the other for
different businesses of the firm in the market.
Expenditure on advertising:
An economic crisis has always helped in pointing out the losers and the winners. Companies like Procter and Gamble survived the great depression just by spending at least double what they were spending on advertising. Target saw its profits grow by more than 45% after the great recession of 2001 hit the market, with the collapse of America's housing market.
Before the pandemic had hit us, Amazon accounted for less than 5% of the total retail sales around the United States of America. But as the pandemic grew and people were forced to be inside their houses, many experts have predicted that the company will soon be responsible for more than 25% in sales, as compared to the 15% milestone it achieved last year.
These experts also believe that consumers are constantly and
increasingly moving towards the idea of online shopping, and many of these
people will probably never go to the walk-in stores to shop even when the
pandemic is over.
The results of advertising more:
Amazon has spent more than $6 billion in advertising in 2019, and this fact made the firm the largest spender in advertising in the US during 2020.
It is also interesting to note that the firm also makes around four billion dollars a year in advertising. Or at least that much was made during the first quarter of 2020. This was more than 40% of an increase as compared to the previous year.
These adverts are seen on products like Amazon Prime, Kindle, and even on the Homepage of the firm, Amazon.com. Some of these adverts are purchased by sellers who are already paying a fee to get listed on Amazon.
However, they are also afraid that their product will die out without proper promotion and advertising.
Amazon takes a spot in the top three digital ad sellers in the United States of America, preceded only by Google and Facebook. The firm aims at making a more firm grip on the online market and can even expand more. The company has created such an environment for affiliate marketing that the buyers bid for keywords that promote their products.
As the number of people participating in this bid increases, the price
for each word increases too. The company's earnings report shows a clear sign
of revenue increment of more than 40% from the previous year, which saw a hike
in the same of more than 350% since 2017. Some retail analysts also say that
they feel like the firm is in a chess game with its retailers and is already
thinking six to eight steps ahead of everyone.
Amazon, in terms of pure training terms:
The firm is also a safe haven for investors now in the perfidious equities market. The firm has earned more than half a trillion in its market cap. This has happened in the current fiscal year. The shares are expected to climb even more when the firm reports its earnings on July 30.
According to analysts from Goldman Sachs, the firm's revenue will
show more than a 50% upsurge in northern parts of America compared to the last
year. Jeff Bezos, who already has a net worth of around $178 billion, is all
set to become the world's first trillionaire by the end of 2026.
Where else is Amazon?
Due to the goliath size of the firm, it has huge advantages that it avails privately. One of the subsidiaries of the firm called AWS, or the Amazon web services earned more than $35 billion in sales. AWS is a cloud computing platform that rents out space of networks on its private servers. The sales of the subsidiary have increased more than 35% since the past year.
This achievement led to the firm's step to provide subsidy in grocery
deliverables, an expansion of its warehouse-network and daunt the single-day
delivery without a second thought in terms of the loss that can happen. AWS has
a sort of "cushioned" economic impact that would be otherwise considered
negative. The firm now owns more than 1200 buildings, and the area it covers is
a staggering 278 million square feet for the global logistics network. This has
increased by more than 82% since 2016. The firm is still expanding at an
unprecedented growth rate. Amazon has also announced that it will cover more
than 45 million square feet in logistics in the US alone by the end of
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