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You are here: Home / Computing / Amazon Sales Jump 18 Percent
Amazon Sales Jump 18 Percent Despite a Retail Slump
Amazon Sales Jump 18 Percent Despite a Retail Slump
By Barry Levine / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Brick-and-mortar stores may have had a terrible 2008, but Amazon thrived. The giant online retailer said its sales in the fourth quarter were up 18 percent to $6.7 billion, compared to $5.67 billion in the same quarter a year ago.

The company's free cash flow increased 16 percent to 1.36 billion. Net income rose 8.7 percent, to $225 million, and Amazon reported its best holiday season ever. Net sales for the full year increased 29 percent to $19.17 billion, and operating income for the year increased 28 percent to $842 million.

Strong Demand for Kindle

Founder and CEO Jeff Bezos said his company will remain focused on "serving customers with low prices, great selection, and free shipping offers." He added that Amazon is "grateful for the unusually strong demand for Kindle in the fourth quarter." Kindle is Amazon's e-book reader.

In the fourth quarter, Amazon said the Kindle Store increased its selection of titles by 45,000 for a total of 230,000. Nearly all The New York Times best-sellers are available at $9.99 or less.

The company noted that, except for a $26 million unfavorable impact from year-over-year changes in foreign exchange rates during the quarter, its operating income would have grown 10 percent compared to a year ago. Operating income was $272 million, compared with 2007's $271 million.

Amazon scored increases across territories. North American sales, for instance, were up 18 percent in the fourth quarter, and international sales, including the United Kingdom, German, Japanese, French and Chinese sites, were up 19 percent to $3.07 billion for the quarter.

The fourth quarter's worldwide media sales grew nine percent, and worldwide electronics and other general merchandise sales were up 31 percent.

'As Perfect a Storm'

The company said highlights for 2008 included its introduction of frustration-free packaging, which it described as an initiative to make it easier "for consumers to liberate items from their packaging by eliminating hard plastic clamshell cases, plastic binds, and plastic-coated wire ties."

The MP3 music service at the United Kingdom site of Amazon launched with more than four million DRM-free songs from the four major labels and hundreds of independent ones. There was also the launch of Amazon CloudFront, a pay-as-you-go content delivery Web service, and the expansion of the Amazon Elastic Compute Cloud so that it can run Microsoft Windows Server.

Michael Gartenberg, a technology analyst, said that, "if you look at Amazon's numbers, it certainly feels this was a year when shopping online, in particular at Amazon, trumped brick-and-mortar stores." He added that in 2008, with value- and time-oriented shoppers, and high gas prices for at least part of the year, "the whole Amazon experience was about as perfect a storm as you can get."

Amazon, he said, offers depth, convenience and value, and this past year may have marked a turning point in what kinds of products people are willing to buy online. For instance, Amazon has said that big-screen TVs were a big seller, whereas such big-ticket items traditionally have been the domain of brick-and-mortar stores.

Image credit: iStock/Artist's concept.

Read more on: Amazon, Jeff Bezos, Kindle
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