Booming sales during peak season but no profit? Amazon takes half!

When collecting sales data for Amazon's Black Friday peak season, I found a stock analysis agency released a shocking data that during this year's peak season, Amazon's comprehensive profit share has reached 42%, nearly half! This is equivalent to Amazon taking 42 cents of every $1 in sales in the US e-commerce industry!

Financial giant Truist has recently been monitoring Amazon's performance during the e-commerce peak season since November, and conducted an in-depth assessment based on Amazon's latest financial report released in early November. It believes that Amazon's performance during the peak season was very terrifying, grabbing about 42% of the sales and profits of the entire e-commerce industry, fully demonstrating its dominant position in the e-commerce industry.

For this reason, Truist re-rated Amazon's stock, saying that Amazon's strong performance means its stock price still has a lot of room for growth, and raised its predicted price for Amazon's stock to US$3,650, which is about a 14.23% increase.

This year-end is not just good for Amazon. The sales of e-commerce platforms such as Walmart and Target have skyrocketed, with online sales increasing by 174% and 155% respectively, which is higher than Amazon in terms of growth. However, Amazon is still the e-commerce platform that benefits the most from the year-end peak season guarantee, crushing the first two in market share.

Amazon also said yesterday that this year's Black Friday and Cyber ​​Monday shopping season was the biggest promotion ever, with Amazon and third-party sellers launching more deals on the platform than ever before.

However, despite Amazon's dazzling performance during the peak season, small and medium-sized sellers are complaining. In addition to the fact that advertising costs generally double during the peak season, which we mentioned yesterday, the rising logistics costs and the large discounts during the peak season activities have squeezed the profit margins of sellers.

After the online shopping season ended these two days, everyone was basically calculating orders and profit margins. Many sellers had not had time to be happy after experiencing a wave of order increases. After calculating the costs and discounted prices, they made almost no profit.

In addition, there are some returns and customer complaints that are not counted. Especially yesterday, we reported that there may be a large number of orders delayed before Christmas. These future hidden costs will further reduce profit margins. Sellers must pay attention to this in the near future. The good news is that Amazon is also trying its best to solve the order delivery problem.

At the same time as the Black Friday Cyber ​​Monday sale started, Amazon announced an additional bonus program of up to $500 million to incentivize front-line warehouse and logistics employees during December. They can handle the workload according to the peak season and receive periodic rewards, with each person receiving a minimum bonus of $300 (full-time) or $150 (part-time).

And yesterday, Amazon also launched 8 new FBA delivery centers in the central United States. Each warehouse is equipped with at least 2,000 front-line full-time employees and 5 small distribution stations to solve the problem of tight distribution capacity in the central United States.

To sum up, although the Black Friday Cyber ​​Monday sale is over, it is far from time to relax and we still need to be alert to the delivery issues. Especially for sellers with limited profit margins in this big sale, we need to avoid hidden costs such as returns and customer complaints.

The peak season at the end of the year has come to an end. After this big promotion, we also need to plan our next operation ideas and plans. Do we need to launch new products/new categories? Do we need to prepare new trademarks? The European site has performed very well this year. Is it time to expand into new markets? All these things need to be planned in advance.