Amazon rakes in the holiday season cash, online retail alive and well
Amazon has already come out to ring in the new year with a solid statement showing its good luck in the 2008 holiday season. The company said that 2008 was actually its best holiday season to date with its busiest day seeing a 17% gain over the year before. Even with the economy slowing down, consumers are willing to buy but only at the right price.
Online retail shops have proven to be highly competitive especially in gloomy economic cycles. Consumers are enjoying the lower prices brought on by low overhead, no need to have someone check you out at the checkout line, no need for a storefront and the only true overhead costs are bandwith for the website and shipping. Shipping often ends up to be a win-win for online retailers as they cover their cost to ship and profit a little on each product shipped. No sales tax for shoppers in different states also gives consumers a reason to buy online rather than offline.
Amazon orders topped 6.3 Million items on December 15 which is its largest online day for orders. To compare the online retailer sold 5.4 million items on the same day a year ago, a huge difference considering the economic differences of 2007 and 2008.
Looking back at years prior Amazon really did well with customers this year as well. The online retail has been slammed during holiday seasons past when their products failed to reach the consumer before Christmas day, leaving many shoppers unhappy and hurting Amazon’s stand in the online retail business.
At $52 per share Amazon is cheap compared to early values of near $100 per share. The company’s earnings release to come next month looks like its going to stun the street. I’d be buying here and sell off into the earnings buying momentum.
