News

Kindle fuels 'fastest growth' in a decade at Amazon

27.07.11 | Lisa Campbell

Amazon.com is experiencing its "fastest growth" in more than a decade with accelerating Kindle sales, according to its founder Jeff Bezos, but at a cost to the bottom line.

The giant e-tailer increased sales by 51% in the three months to 30th June 2011 to $9.91bn (£6.04bn), but profits came in at $191m (£116m), a decrease of 8% on last year, as the company continues to invest in expansion.

International sales, which include sales at Amazon.co.uk, grew to $4.57bn in the second quarter of 2011 in comparison to $2.9bn in the second quarter of 2010, with the operating income at £172m in comparison to $206m in 2010.

Kindle 3G with Special Offers has now become the company’s bestselling e-reader, with the Kindle the bestselling item overall ahead of the DVDs of Harry Potter and the Deathly Hallows Part 1 and The King’s Speech. Amazon said that in the UK only one book featured in its top ten bestselling items by volume list, the e-book version of Truth Dare Kill by Gordon Ferris (Corvus), which came in at number 10.

"Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade," said Bezos, who is also c.e.o. of the business. "Kindle 3G with Special Offers has quickly become our bestselling Kindle at only $139."

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By Chris Nicholl

That's "fastest growth" in turnover. Profits - which are a more important measure are down! It would be good if The Bookseller could focus on what's important rather than just spit out th press release.

Wed, 27/07/2011 - 10:57
By RobC

At what point is Amazon's pricing deemed predatory?

Wed, 27/07/2011 - 11:12
By Clive Keeble

The Bookseller Group, BA, IBP, and PA would have been better advised to explore this avenue (predatory pricing) than their suggestion that the takeover of TBD by AZ could in anyway be classified as restricting competition in the UK market.

Amazon will happily discount and loss lead books, in many instances I feel sure that this could be accepted (and proved) as predatory pricing which is contrary to both UK national and EU regulations.

Do the various trade bodies have the collective will for the fight or are they going to meekly surrender their customer base to Amazon ?

Wed, 27/07/2011 - 12:07
By Philip Jones

Hi Chris, don't agree with that at all. Philip Downer says it better than me here: http://frontofstore.org/2011/07/28/amazon-speed-of-ascent-breadth-of-rea...
The point being that Amazon is powering on, even as its business is changing. This may put some pressure on the bottom line, but it isn't chronic. Can be compared to B&N, about whose digital strategy no-one has a bad word to say, which made a $70m loss in its past quarter.

Thu, 28/07/2011 - 11:39
By Clive Keeble

Philip, but B&N do not have the advantages of Marketplace third party seller income.

The only comparable income stream of which I am aware is "slots" - fruit machines- and just look at the massive government licence fee payable on each machine !!!

In 2001, prior to the launch of Marketplace on .com site (April 2002 on .co.uk) Amazon were in serious risk of folding, their original marketing efforts had cost a fortune and they were not getting the income from being primarily a direct seller.

The rest is history ; Marketplace third party seller income afforded Amazon the assured income stream to allow them to predatory price loss lead many new books.

It is now probably too late to save the booktrade as we knew it ten years ago ; thank goodness I am well beyond retirement age and don't have any relatives relying upon the trade to provide for their future.

Thu, 28/07/2011 - 12:43
By Chris Nicholl

Philip - Your perogative of course but I note the Bookseller is also linking to 'Retail Week's' coverage of the story and they at least felt the dip in profits was worthy of inclusion in their headline.

http://www.retail-week.com/multichannel/online-retail/amazon-sales-surge...

Like Clive I fear the 'investment' referred to in this headline is an investment in low prices for market share.

Thu, 28/07/2011 - 16:59
By Chris Nicholl

That's "fastest growth" in turnover. Profits - which are a more important measure are down! It would be good if The Bookseller could focus on what's important rather than just spit out th press release.

Wed, 27/07/2011 - 10:57
By Philip Jones

Hi Chris, don't agree with that at all. Philip Downer says it better than me here: http://frontofstore.org/2011/07/28/amazon-speed-of-ascent-breadth-of-rea...
The point being that Amazon is powering on, even as its business is changing. This may put some pressure on the bottom line, but it isn't chronic. Can be compared to B&N, about whose digital strategy no-one has a bad word to say, which made a $70m loss in its past quarter.

Thu, 28/07/2011 - 11:39
By Clive Keeble

Philip, but B&N do not have the advantages of Marketplace third party seller income.

The only comparable income stream of which I am aware is "slots" - fruit machines- and just look at the massive government licence fee payable on each machine !!!

In 2001, prior to the launch of Marketplace on .com site (April 2002 on .co.uk) Amazon were in serious risk of folding, their original marketing efforts had cost a fortune and they were not getting the income from being primarily a direct seller.

The rest is history ; Marketplace third party seller income afforded Amazon the assured income stream to allow them to predatory price loss lead many new books.

It is now probably too late to save the booktrade as we knew it ten years ago ; thank goodness I am well beyond retirement age and don't have any relatives relying upon the trade to provide for their future.

Thu, 28/07/2011 - 12:43
By Chris Nicholl

Philip - Your perogative of course but I note the Bookseller is also linking to 'Retail Week's' coverage of the story and they at least felt the dip in profits was worthy of inclusion in their headline.

http://www.retail-week.com/multichannel/online-retail/amazon-sales-surge...

Like Clive I fear the 'investment' referred to in this headline is an investment in low prices for market share.

Thu, 28/07/2011 - 16:59
By RobC

At what point is Amazon's pricing deemed predatory?

Wed, 27/07/2011 - 11:12
By Clive Keeble

The Bookseller Group, BA, IBP, and PA would have been better advised to explore this avenue (predatory pricing) than their suggestion that the takeover of TBD by AZ could in anyway be classified as restricting competition in the UK market.

Amazon will happily discount and loss lead books, in many instances I feel sure that this could be accepted (and proved) as predatory pricing which is contrary to both UK national and EU regulations.

Do the various trade bodies have the collective will for the fight or are they going to meekly surrender their customer base to Amazon ?

Wed, 27/07/2011 - 12:07

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