Amazon - Checkout

Amazon is multi-billion company based in US that has many services such as e-commerce, cloud computing, artificial intelligence and digital streaming. Amazon is a stage that sells everything from couple of screws to car seats to clothes.

Amazon Vendor Central:

Sellers can sell their product directly to Amazon on wholesale rates. The ownership of the product belongs to Amazon. Amazon then sells these products and keeps the profit to them. Amazon vendor central is invite- only program that usually consist of manufacturers and wholesalers.

How Amazon Works:

Amazon allows its sellers to sell their product on their website. Sellers advertise their products on the website. Buyer search for the particular product in the search bar and list of available products will be visible to the buyer. Buyer can then select from the multiple listing, the best product based on its reviews and pricing. Buyer can select shipping from different shipping companies based on number of days required for delivery and cost of the delivery.

Amazon

Scope for Investment in Amazon:

Amazon as an e-commerce company, it also has cloud operations with its AWS (Amazon Web Services). The company is the market leader in the cloud market. AWS is growing fast and is the most profitable business segment for Amazon. It reported an operating income of $4.1 billion in the first quarter of 2021 which was over 46% of the total operating income.

Amazon is a growth company despite its market capitalization reaching almost $2 trillion and quarterly revenues in excess of $100 billion. While a lot of growth names are making losses, Amazon is a sustainably profitable company.

Along with the domestic markets, Amazon also allows users to buy products internationally. For many people across the globe, Amazon and e-commerce are synonymous, just like internet browsing and googling are used interchangeably.

AMZN stock trades at an NTM (next-12 months) PE multiple of 60.7x. The multiple has averaged 84x, 80x, and 104x over the last one year, three years, and five years respectively.

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