Some might view branching into groceries, or original video content -- or even delivery services that could soon rival FedEx and UPS --as leaving the e-commerce circle of competence. But to CEO Jeff Bezos, these moves are just a continuation of the company's mission: to disrupt industries that aren't serving customers as well as they could be, and rewrite the rules.
That gives the company an unending list of potential futures that will be exciting to see unfold.
2. A founder-led company
We here at The Motley Fool love founder-led companies -- perhaps because Tom Gardner is still at the reins here. Jeff Bezos founded Amazon back in 1994, and he's been at the helm ever since.
3. Bezos has lots of skin in the game
Lest you think that Bezos is using Amazon as a simple cash machine to enrich himself, it's worth noting that he has a significant personal stake. As of the company's April proxy statement, Bezos owned roughly 83 million shares of Amazon. That's equivalent to almost 18% of the company, and worth about $64 billion. When you invest with Amazon, your interests are aligned with Bezos'.
4. The e-commerce trend is just getting started
It's hard to capture just how far e-commerce still has to go:
Image source: U.S. Census Bureau
According to the U.S. Census Bureau, we have only seen the tip of the iceberg. As of July, only 8% of all retail sales occurred via e-commerce. While I don't think we'll ever see the figure approach 100%, even if half of all purchases are eventually made online, that means a quintupling of today's levels. Amazon, more than anyone, stands to benefit from this.
5. Those fulfillment centers deliver a huge moat
One of the biggest advantages Amazon has over the competition is its network of fulfillment centers. According to logistics consultant MWPVL, the company has 82 such centers in America, with plans for 31 more. These centers are multimillion-dollar buildings; competitors would have to go into deep debt to just scratch the surface of matching Amazon's scale.
Research by Piper Jaffray finds that an incredible 44% of the U.S. population now lives within a mere 20 miles of an Amazon fulfillment network "node."It's because of this network that Amazon can deliver your packages so quickly -- the main benefit of membership in Amazon Prime.
6. The strength of Prime
The benefits of a $99 Amazon Prime membership are astounding. But really, it all comes down to free two-day shipping. How popular is that deal? The company is pretty tight-lipped about such numbers, but that hasn't stopped others from doing their own research.
BI Intelligence estimates that in December 2011, there were fewer than 10 million Prime members. By the end of last year, it's believed that this figure increased 700% to 80 million members.
For the complete article please visit
FOX Business
ABOUT
Dynamic Wealth Research was founded on the principle the world is changing at an ever-increasing pace. The greatest profit opportunities an investor will ever find are from massive, sweeping changes. Dynamic Wealth Research analyzes and closely follows these changes, keeps its readers on the leading edge of them, and shows you how to be best positioned these anxious, interesting, and ultimately profitable times.
