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Amazon’s Profits Plummet in Third Quarter

The biggest online retailer in the United States, Amazon, does not get its dominant position through conservancy – it spends money. Amazon is aggressive, innovative and a juggernaut in delivery and personalization. As Amazon remains a threatening competitor for most retailers, it reported its biggest quarterly net loss since 2003. This announcement of third quarter earnings led Amazon shares to drop 9.3 percent.

Producing $74.5 billion in sales during 2013, Amazon’s revenue is not enough to outpace its spending. Scott Tilghman, an analyst at Riley & Co., told Bloomberg, “the biggest component is the expense side of the equation. They’ve got a big checkbook they keep writing upon, which all results in a top line that is less robust than thought.”

As the end of the year approaches, many will be waiting to see if Amazon’s spending on programming and customer retention results in substantial sales dollars this holiday season.

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About Sara Logel

Sara Logel
As NRHA’s market research analyst, Sara conducts organic research and stays abreast of industry trends to help hardware retailers better run their business. Sara also contributes to editorial content in Hardware Retailing magazine. Sara received her B.S. in Marketing and Spanish from Butler University and, after graduation, began her career with NRHA. Sara enjoys traveling, being outdoors and exploring the city of Indianapolis.

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