Founded in 1994 as an online store specializing in selling consumer goods, nowadays, Amazon is one of the largest companies in the world offering online retail sales of consumer products as well as web services.
The company boasts more than 400 million active users worldwide and is a leading player in e-commerce. Its business model revolves around online retail, where customers can buy goods through the Amazon website or mobile app. The company also provides subscription and home delivery services – Amazon Prime and Amazon Music.
A key aspect of Amazon is its efficient inventory management system, enabling the company to swiftly respond to changes in demand and ensure prompt delivery to customers. In addition, this giant actively invests in research and development of new technologies to remain at the top of the market and offer customers cutting-edge products.
This unique approach helps Amazon balance between large suppliers and small entrepreneurs selling their goods on the platform. As a result, investor confidence continues to grow, and a market capitalization exceeding $1 trillion proves it.
In 2018, Amazon acquired Whole Foods, expanding its product range to include fresh and organic products. In 2020, the company also bought Twitch and enhanced its presence in the streaming services market as a new content brand called Amazon Originals.
Apart from that, two of the world’s largest technology corporations, Google and Amazon, will together invest $25 billion in have announced their intention to significantly increase investments in the Indian domestic market. Google committed to invest $10 billion to India’s digitization fund, while Amazon announced its future investment of $15 billion (taking its total investment to substantial $26 billion).
Speaking of the news front, the US Federal Trade Commission (FTC) has filed a lawsuit against Amazon. According to the FTC, the company deliberately forced customers to subscribe to its paid Prime service for an annual fee of $139. This subscription grants access to express delivery, video streaming, and a library of 100 million songs. While multiple Prime subscription options were presented on the purchase completion page, the process of opting out of the service required clarification. Consequently, users needed assistance in understanding that they were agreeing to a subscription with recurring payments
The lawsuit also asserts that Amazon made it cumbersome to unsubscribe, requiring unnecessary steps. Furthermore, the company bombarded customers with special offers in an attempt to make them reconsider their decision. The FTC claims that Amazon had the means to modify the pages to ensure user comprehension but failed to do that.The potential amount of the fine has not been disclosed. However, in December 2022, Epic Games paid $520 million in a similar lawsuit.
Interesting though, that after this news Amazon stock price surged. It is highly likely that the previous peak of $145 will be surpassed in future trading, as. And perhaps it will reach $170. Nonetheless, it is premature to state this with absolute certainty. One thing is evident: prices show no signs of declining.
A major challenge for Amazon is the competition with other companies like Walmart (NYSE: WMT) and eBay (NASDAQ: EBAY). This rivalry necessitates constant improvement of Amazon’s products and services to maintain its position as the market leader. After all, healthy competition fuels innovation.
Another issue is the high cost of goods delivery. Amazon allocates significant resources to shipping products worldwide, which can result in higher prices for buyers. Rumors suggest that the company plans to establish a separate transportation division to compete with other delivery services.
Furthermore, Amazon faces a shortage of qualified employees. The company requires a substantial workforce to support its operations. It has been actively incorporating robots into its warehouses to streamline processes and reduce production costs.
Lastly, Amazon needs to enhance data security. Unfortunately, the company has been reluctant to disclose the exact number of customers affected by the security breach that hackers used multiple times to steal private information of the clients already.
In the world of trading, it is crucial to keep in mind the significance of conducting thorough research before making any trading decisions. While there are various trading tools available, such as the economic calendar or stock screener. By utilizing these resources alongside your own expertise, you can enhance your market analysis and make well-informed trading choices.