Amazon Tests Drones for Same-Day Parcel Delivery

I strongly disagree with your statement.

"...Amazon has a profitable business.
It has figured out how to make money. Now, it's investing in expensive stuff like fulfillment centers to create a more profitable, global business.

His full analysis is worth a read, but if you're short on time, here are the key points:

-His two-sentence explanation of Amazon's business: "Amazon is a classic fixed cost business model, it uses the Internet to get maximum leverage out of its fixed assets, and once it achieves enough volume of sales, the sum total of profits from all those sales exceed its fixed cost base, and it turns a profit. It already has exceeded this hurdle in its past."

-Amazon loses money on a few retail items, but when that's happening it tries to correct the reasons it's losing money. There are a few loss-leading items, but for the most part its retail operations are profitable.
Amazon as a platform is incredibly profitable. Lots of people and companies sell through Amazon, which has very little cost for Amazon.

-Amazon is losing money because it's investing like crazy in fulfillment centers, and other expensive things to stay 100 steps ahead of the competition. Amazon has found that cheap, fast shipping leads to a big jump in sales, so it's investing in making that possible.

-Amazon could turn a profit today if it stopped investing. Wei says Amazon turns a profit on almost all transactions. It posts quarterly losses because of its massive investments. A lot of people think Amazon will eventually be profitable when it has a monopoly on e-commerce and starts raising prices. That's wrong, it just has to stop investing."
http://www.businessinsider.com/amazo...rstand-2013-10

Amazon.com Announces Third Quarter Sales up 24% to $17.09 Billion...
Nine Months, Ended September 30, 2013 (Income from operations in millions) - 235 ...
http://phx.corporate-ir.net/phoenix....092&highlight=

Boris Romanov

Nothing but a publicity scheme in my opinion. I fly radio control airplanes, and helis for fun, and i can tell you the up keep alone is amazing. These things require constant tuning and adjusting to fly correctly.

Nothing but publicity and notice how fast the media jumped on it?? Free advertising, and by now everyone the world had heard the buzz,

Beside around here the guys would shoot the hello out of anything like that just for the fun of it.

My poor dog would have nothing to go psycho over if something just dropped from the sky silently..not fun...

With increased revenue they still managed to lose $41 million in the third quarter. I'm not saying that they won't eventually show a profit, just that they're not doing it now. They just raised their minimum free shipping to $35. Some people see this as Amazob recognizing that they need to start focusing on making money. Investment is great but they are investing in a lot of brick and mortor with all the new distribution centers. As Amazon knows, successful business models change and who knows when the next Bezos comes along with a better idea and the Amazon model goes obsolete just as quickly as it rose.

In my opinion your initial statement ("Bezos is a billionaire and his company ships a lot of things but Amazon isn't profitable.") was the wrong statement in general. And you simply misinformed forum's members and guests.

The Market is the best Judge:

Stock price going up doesn't mean a company was profitable. It just means that people are willing to bet the price of the stock will continue to rise. In Wall Street terms Amazon posted negative earnings last quarter. That's financial analyst speak for they lost money.

This is not an acceptable argument to make false statements about company profitability in general.

Once again, "Wei says Amazon turns a profit on almost all transactions". (post #21).
This statement is the true statement, but not yours.

In addition, "Amazon.com rivals Wal-Mart as a store, Apple as a device maker, and IBM as a data services provider. It will rake in about $75 billion this year. For his book, Bloomberg Businessweek’s Brad Stone spoke to hundreds of current and former friends of founder Jeff Bezos. In the process, he discovered the poignant story of how Amazon became the Everything Store."
http://www.businessweek.com/articles...-by-brad-stone

New anekdot: Unprofitable company is the real rival of monsters like Wal-Mart, Apple and IBM...

We'll find out that some endangered species of owl thinks these things are either prey, or mates. Several owl deaths will be attributed to the drones and the EPA will put such heavy restrictions on them that they become economically unfeasible.

I just can't see drones delivering to peoples door steps. I think they could be very useful in transporting goods between distribution centers. I have also wondered why the air-lines haven't gone to remote controlled planes. I'm guessing they feel passengers wouldn't go for them.

Both statements can be equally true. Amazon may well make a profit on most transactions. They also spend that profit and more on things like new distribution centers and studying the profitability of drones. If they spend more than they bring in they are not profitable. In the third quarter of 2013 Amazon generated revenues of $17.09 billion. They also spent enough to lose $41 million or about 9 cents per share.

This this the first step: Self-driving cars now legal in California

"...There have been no accidents while the cars were controlled by the computer. The only documented accident with one of the Google vehicles was a fender bender that took place while a human was in control..."
http://www.cnn.com/2012/09/25/tech/i...ar-california/

The next step is a flying taxi like this prototype:

"The Jetpod is a small twin-jet aircraft equipped with VQSTOL (Very Quiet Short Take-off and Landing) technology - requiring just 125m (410ft) to take off and 300m (985ft) to land - and is designed to reduce noise emissions by up to 50 percent. Avcen was hopeful of encouraging short-distance air travel in built-up urban areas via elevated runways above harbors, roads and railway tracks, handling arrivals and departures from ‘park-and-fly’ terminals located in the suburbs."

or like flying taxi in "The Fifth Element",


then a self-driving flying taxi and so on...

So, what?
This this is not a real proof of your initial general statement...

My general statement was that Amazon is not profitable. I'm not sure what part of showing that they lost money doesn't prove this statement. I'm done.

Glad to hear this...

"...As of Nov 30, 2013, the consensus forecast amongst 44 polled investment analysts covering Amazon.com, Inc. advises that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts improved on Oct 19, 2009. The previous consensus forecast advised investors to hold their position in Amazon.com, Inc.."
http://markets.ft.com/research/Marke...sts?s=AMZN:NSQ

LOL

Amazon had $61 Billion in sales last year, and continues to grow like crazy.

That's a lot of hamburgers and apple pie.

If they aren't making a "profit", they are surely keeping a roof over their heads.

http://www.internetretailer.com/2013...1-billion-2012


The stock price goes up, because investors believe the Company is valuable.

Yes they do and I was thinking about this myself. It's all fun and games until a few of these drones crash into someones personal property and cause real damage, or worse yet crash into a human or pet and cause injury.
Probably be a few lawsuits until they get the system dialed in and more accurate/reliable.

Next thing you know we will have to buy drone damage insurance on our home owners insurance.

Hmm, I wonder if instead of shooting them down one could use some sort of large sticky pad on your porch that would trap the drone until you had time to put it out of its misery... Like the sticky mouse pad traps they have now.

not to worry; those little suckers can't lift a air to ground missile.

__________________
I am me. I like me. Please don't try to change me.

IMO, No drones will fly commercially, on any large scale, until some type of smart traffic management system is in place, such as an automatic air traffic control system, which all drones will have engineered into them.

They will know where they are at - at all times, plus know where all other drones are in their immediate area and be able to intelligently avoid each other, plus other obstacles.

More that likely the Government will have to design and build the system, for the FAA

A ways off, for sure.

Once again, Bezos has an excellent market vision and he knows how and when to invest money. There is no doubts that he already analyzed this information too: "...The skies are going to look very different pretty soon, and it's been a long time coming. Congress finally passed a spending bill for the Federal Aviation Administration, allocating $63.4 billion for modernizing the country's air traffic control systems and expanding airspace for unmanned planes within three and a half years.

By Sept. 30, 2015, drones will have to have access to U.S. airspace that is currently reserved for piloted aircraft. This applies to military, commercial and privately owned drones — so it could mean a major increase in unmanned aircraft winging through our airspace. That's airspace to be shared with airliners, cargo planes and small private aircraft.

As it is now, drones can only use some pieces of military airspace and they can patrol the nation's borders. Some 300 public agencies can also use drones, according to the AP, but they must be at low altitudes and away from airports..."
http://www.popsci.com/technology/art...ed-planes-2015

I don't see drones being viable delivery vehicles on a large scale for quite some time. Lots of logistics problems to overcome. Cool idea, though.

Amazon is huge. But having worked there for a couple of their peak seasons, I have to think that things may not be as rosy for Amazon as the common person may think. Morale among workers is at an all time low. I'm hearing more and more complaints about customers getting the wrong stuff, getting damaged or used stuff when they ordered new, and more and more accounts of people getting a hard time from customer service when trying to get things rectified. Amazon is becoming less likely to damage out items that are returned, things they previously would not resell. Things like clothing (UNDERWEAR!!) might arrive at your house with a distinct odor of having been worn. Things like piercing jewelry might not be new either, which means that it could have been someplace you wouldn't want to go, and it -might- have gotten cleaned in some way. That's all an effort in trying to pry out a few more nickels of profit. Enough of that stuff causes people to shop elsewhere which may not be so great for the long term outlook at Amazon. Things can change, for better or worse, but I don't have my rose colored glasses on anymore.

I wouldn't buy jewelry, clothing or food from Amazon. I've seen the fulfillment centers on the inside. No thanks. Then again, your mileage may vary...

That's probably why Amazon does not have profits, but IMO, no way in two years.

Again, this is the Government making this 2 year timeline.

This is a huge issue, not to even mention how drones avoid contact, with each other. If Amazone is oging to run a fleet of drones, so will Pizza Hut, Autozone, UPS and 10,000 other companies, eventually.

Drones will have to have their own collision avoidance systems, if for liability, if anything. landing in an open airstrip and someones back yard - for the first time, are two different things.

http://www.usatoday.com/story/travel...rones/3805447/


It will happen eventually.