Amazon.com, Inc. (NASDAQ: AMZN)
Amazon is a very interesting company to follow. Had you asked me in mid 2014 what I thought we would see from AMZN, I would have had a very different opinion from what I have now. Back then, I was very concerned about the direction to the company was moving. Nonetheless, 2015 was a great year, and I believe that the year 2016 is going to be strong as well; especially if Jeff Bezos’ next plan works out. Today, we’ll talk about what that plan is, other reasons I’m bullish on AMZN, and what we can expect to see from the stock moving forward.
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Jeff Bezos Has A Big Plan For AMZN
Amazon’s classic style is to dominate. The company dominated online retail by offering incredibly low margins on its products. Then, by investing in solid infrastructure, AMZN solidified its position as the king of online retail. Now, the company is looking to dominate another area entirely. Amazon is planning on jumping off line and creating brick and mortar stores. Book stores to be exact. In fact, Bezos wants to launch hundreds of book stores around the United States. While this may not seem as big as it is, when you take an out of the box approach with regard to how the company will make money in these stores, it becomes clear that AMZN is on to something.
When you think about the classic book store, there’s not much that comes to mind… they sell books! Sure, there’s money to be made in books, but I don’t think Amazon’s book store is going to be the classic kind of store we’re thinking about. Instead, I think it will be more like a mix between a book store and a tech store. Think about it, AMZN offers the Kindle, Fire TV stock, and several other technology products. Wouldn’t these sales climb if there was a demo store to peak consumer interest? Absolutely! All in all, if Bezos does open hundreds of book stores, as he plans, this could be the factor that pushes AMZN over the edge and sends the stock skyrocketing upward!
Other Reasons I’m Excited About AMZN
Amazon is having a rough time in the market at the moment thanks to a poor earnings report. However, in this particular case, it’s relatively easy for me to look past earnings and consider future profitability. While the idea of Amazon book stores is a part of this, there are other reasons that I’m bullish on AMZN.
- AWS – Amazon Web Services, the cloud service offered by the company, is growing quickly in popularity. After just hearing stats about it around a year ago, the company has skyrocketed. Personally, I live in the tech realm, and I hear about AWS all of the time. I use it, my cousin uses it, my clients use it, and more! The company has done such a good job of marketing this service that I wouldn’t be surprised if AMZN takes a lion’s share of the cloud storage business!
- Prime – A while ago, Prime was one of the factors that concerned me about Amazon. However, last year, more and more data came out with regard to the amount of Prime members out there and how these members use the service. While the $99 fee for everything consumers get may yield a loss, the fact that massive amounts of Prime members spend massive amounts of money at AMZN turns this questionable venture into a profitable business.
- Dominance Model – All in all, the business model at Amazon is key. The company deals in dominance no matter what industry it steps in. It has dominated online retail, it’s likely to dominate the cloud industry, and if it opens book stores, I would expect for it to dominate in that area as well. All in all, the business model at AMZN is one that will likely continue to outpace its competitors for years to come!
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of AMZN. While the stock may continue to struggle in the short term as earnings led to fear, the long term is looking great. Ultimately, I’m expecting this stock to skyrocket!
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What Do You Think?
Where do you think AMZN is headed moving forward? Let us know your opinion in the comments below!
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