Amazon spends a lot of money, but it’s also surprisingly lean. Here’s why even successful companies that are scaling quickly should be doing their best to save money where they can
On top of this, Amazon also spends a tremendous amount of money on growth and expansion. Its third quarter revenue of $43,7 billion represented growth of 34%, but its profit dipped 40% from $575 million to $347 million. Yet, despite this drop in profitability, Amazon’s share price increased by 7%. Why is this? Investors know how and why Amazon spends money.
Since its inception, the company has focused on three things: Low prices, customer service and long-term success. And it hasn’t been afraid of spending money in pursuit of this. It took Amazon six years to turn its first profit, and even after that it was rarely profitable. Only since 2015 has the company become consistently profitable.
This story is from the March 2018 edition of Entrepreneur Magazine South Africa.
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This story is from the March 2018 edition of Entrepreneur Magazine South Africa.
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