Growth River Silting Up at Amazon

The law of large numbers is catching up to Amazon.com.

As it gets more massive, revenue growth at the e-commerce giant is slowing down. Amazon grew its top line by 22% in the first quarter, compared with growth of 34% a year earlier, falling slightly short of forecasts. That continued a trend of deceleration that has emerged the past few quarters.

But amid that slowing, Amazon's gross margin is expanding. It grew by more than a third compared with the previous year to 26.6%, a record level. One cause is more sales happening through third-party sellers. Amazon only books the portion of these sales that it receives. That means lower revenue per unit, but significantly higher margins.

Also helping profitability were growth in its cloud-computing division Amazon Web Services, as well as lower shipping costs. The latter was aided by the opening of more distribution centers and a shift toward sales of more high-margin digital products like music, e-books and videos.

If revenue growth continues to slow, as seems likely, the challenge for Amazon will be to grow margins even more quickly. That will be vital to satisfy investors, many of whom bought into it as a fast-growing Internet stock.

Years of top-line growth have pushed Amazon's valuation to well above 100 times forward earnings estimates, a level that could be tough to maintain as it starts to mature. Indeed, shares fell more than 7% Friday after Amazon's guidance for second-quarter revenue and operating income came in below consensus.

Of course, Amazon may find another way to spur sales such as the set-top box it is developing for streaming video content. But that would likely come at the expense of margins.

For investors, it is time to recognize that Amazon's headiest growth days may be past.

Source: http://online.wsj.com/article/SB10001424127887324743704578446950479320458.html

Note:

Delta Ray is experienced web scraping consultant and writes articles on Extract Amazon Website, Product Details Scraping, Amazon Product Scraping, Linkedin Email Scraping, Screen Scraping Services, Yelp Review Scraping and yellowpages data scraping etc.

Growth concerns dog Amazon as it shores up digital beachhead

The world's largest Internet retailer on Thursday reported its highest gross profit margins in a decade as years of spending on high-margin businesses, from digital media to cloud services, began to pay off. But slower revenue growth and a disappointing outlook for this quarter exacerbated uncertainty about the its business beyond the United States.

Amazon faces a sluggish European economy and has had inconsistent success breaking into emerging markets such as China, where competition from the likes of Alibaba is intense.

Year-over-year unit growth, which measures the number of items Amazon sells, was 30 percent in the first quarter, down from 49 percent in the first quarter of 2012.

As growth concerns worsen, the company will have trouble justifying its triple-digit price-earnings multiple. Analysts at J.P. Morgan, Credit Suisse and Pacific Crest Securities on Friday lowered their price targets on Amazon shares, citing the top-line deceleration.

"As unit growth decelerates, does Amazon stop being a growth stock and start becoming growth-at-a-reasonable price?" said one analyst, who requested anonymity. "Margins are coming up but they are still pretty low, so there's not much support for an earnings multiple valuation."

The analyst did not want to be identified because these concerns are based on a worst-case scenario for Amazon.

"That's not my base case but that's the concern," the analyst added. "The stock could be stuck between $250 and $280."

FUNDAMENTAL SHIFT

Longer-term, investors are keeping a close eye on a fundamental shift in its business.

The Internet retail giant that once specialized in moving books and other physical items quickly is increasingly trying to do the same in the digital world, where profit margins are higher, partly because e-books, music and video files and are transmitted electronically at high speed.

It has diversified aggressively into other revenue streams like digital content, advertising and the Amazon Web Services cloud computing business. Lately, it has even branched into creating original video content.

Throw in a fast-expanding third-party merchant business, where Amazon books a cut of sales from seller listings on its website, and the long-term margin outlook looks solid.

"Over the long term it does help margins," said Ben Schachter, an analyst at Macquarie. "You don't have to put these things on a truck and ship them."

INSIDER:

Shares fall on outlook: link.reuters.com/fev67t

Prime drives revenue: link.reuters.com/gev67t

ROOM TO MOVE

In the first quarter, net shipping costs stood at 4.7 percent of sales, down from 5.1 percent a year earlier.

"What we're seeing is that Amazon is really getting leverage from shipping costs. AWS is becoming a big part of their mix. They are also benefiting from a greater mix of advertising revenues. We'll continue to see that improve," said Victor Anthony, an analyst at Topeka Capital Markets.

But its brick-and-mortar rivals are catching on, in many cases borrowing pages from Amazon's pioneering e-commerce play-book.

"Amazon's now growing at about 2x eCommerce, compared to 3x a year ago," Doug Anmuth, an analyst at J.P. Morgan, wrote in a note to investors following the company's results.

Retailers are losing less market share to Amazon than they used to as they increase selection online, price-match more aggressively, and work to combat showrooming, Anmuth argued.

Shares of Best Buy Co(BBY.N) and HH Gregg Inc(HGG.N), electronic retailers that have been particularly hard hit by Amazon competition, have doubled so far this year.

Amazon shares are up 1.5 percent this year, while Wal-Mart Stores Inc(WMT.N) and Target Corp (TGT.N) are up about 16 percent and 20 percent, respectively.

Despite declines, Amazon shares still trade at about 100 times 2013 estimated earnings and 75 times 2014 forecast profit.

Even on a more-forgiving valuation method, Amazon shares are expensive. The stock trades at about 20 times earnings, before interest, tax, depreciation and amortization, or EBITDA. Google Inc(GOOG.O) trades at about 10 times EBITDA and eBay Inc(EBAY.O) trades at 11 to 12 times EBITDA.

Amazon will need to pump out higher earnings in the future to support such valuations, especially if growth rates continue to slide, analysts said.

The company's gross profit margin hit a better-than-expected 26.6 percent in the first quarter, up from 24 percent a year earlier.

Still, one major source of recent profit growth, Amazon's online marketplace for third-party sellers, known as 3P, stalled in early 2013.

First-quarter 3P unit growth was 33 percent, down from a 40 percent growth rate in the first quarter of 2012, according to Ken Sena, an analyst at Evercore Partners.

Amazon's retail business, known as 1P, buys products at bulk prices and sells them at higher prices, collecting the difference as profit and recording the sale price as revenue.

In a 3P transaction, Amazon books commissions from third-party sales on its marketplace as revenue. That revenue is almost all profit, so as the 3P business has grown, Amazon's gross profit margins have expanded.

The slowdown in 3P growth during the first quarter "has some concerned that the gross margin leverage story may be nearing its end," Sena said.

Amazon shares were down 6.3 percent at $257.36 on Friday afternoon on the Nasdaq, off an earlier low at $252.81.

Source: http://in.reuters.com/article/2013/04/26/amazon-results-digital-idINDEE93P0AY20130426

Note:

Delta Ray is experienced web scraping consultant and writes articles on Extract Amazon Website, Product Details Scraping, Amazon Product Scraping, Linkedin Email Scraping, Screen Scraping Services, Yelp Review Scraping and yellowpages data scraping etc.

Business Intelligence Data Mining

Data mining can be technically defined as the automated extraction of hidden information from large databases for predictive analysis. In other words, it is the retrieval of useful information from large masses of data, which is also presented in an analyzed form for specific decision-making.

Data mining requires the use of mathematical algorithms and statistical techniques integrated with software tools. The final product is an easy-to-use software package that can be used even by non-mathematicians to effectively analyze the data they have. Data Mining is used in several applications like market research, consumer behavior, direct marketing, bioinformatics, genetics, text analysis, fraud detection, web site personalization, e-commerce, healthcare, customer relationship management, financial services and telecommunications.

Business intelligence data mining is used in market research, industry research, and for competitor analysis. It has applications in major industries like direct marketing, e-commerce, customer relationship management, healthcare, the oil and gas industry, scientific tests, genetics, telecommunications, financial services and utilities. BI uses various technologies like data mining, scorecarding, data warehouses, text mining, decision support systems, executive information systems, management information systems and geographic information systems for analyzing useful information for business decision making.

Business intelligence is a broader arena of decision-making that uses data mining as one of the tools. In fact, the use of data mining in BI makes the data more relevant in application. There are several kinds of data mining: text mining, web mining, social networks data mining, relational databases, pictorial data mining, audio data mining and video data mining, that are all used in business intelligence applications.

Some data mining tools used in BI are: decision trees, information gain, probability, probability density functions, Gaussians, maximum likelihood estimation, Gaussian Baves classification, cross-validation, neural networks, instance-based learning /case-based/ memory-based/non-parametric, regression algorithms, Bayesian networks, Gaussian mixture models, K-means and hierarchical clustering, Markov models and so on.

Article Source: http://EzineArticles.com/196648

Note:

Delta Ray is experienced web scraping consultant and writes articles on Extract Amazon Website, Product Details Scraping, Amazon Product Scraping, Linkedin Email Scraping, Screen Scraping Services, Yelp Review Scraping and yellowpages data scraping etc.

Data Mining, Not Just a Method But a Technique

Web data mining is segregating probable clients out of huge information available on the Internet by performing various searches. It could be well organized and structured, or raw, depending on the use of the data. Web data mining could be done using a simple database program or investing money in a costly program.

Start collecting basic contact information of probable clients, such as: names, addresses, landline and cell phone numbers, email addresses and education or occupation if required.

CART and CHAID data mining

While collecting data you will find that tree-shaped structures that represent decisions. These derived decisions give rules for the classification of data collected. Precise decision tree methods include Classification and Regression Trees also know as CART data mining and Chi Square Automatic Interaction Detection also known as CHAID data mining. CART and CHAID data mining are decision tree techniques used for classification of data collected. They provide a set of rules that could be applied to unclassified data collected in prediction. CART segments a dataset creating two-way splits whereas CHAID segments using chi square tests creating multi-way splits. CART requires less data preparation compared to CHAID.

Understanding customer's actions

Keep a track of customer's actions like: what does he buy, when does he buy, why does he buy, what is the use of his buying, etc. Knowing such simple things about your customer will help you to understand needs of your customer better and thus process of data mining services will be easier and quality data would be mined. This will increase your personal relations with your customer which would finally result in a better professional relationship.

Following demography

Mine the data as per demography, dependent on geography as well as socio economic background of business location. You can use government statistics as the source of your data collection. Keeping it in mind you can go ahead with the understanding of the community existing and thus the data required.

Use your informal conversation in serving your clients better

Use minute details of your conversation and understanding with your customers to serve them. If essential, conduct surveys, send a professional gift or use some other object that helps you understand better in fulfilling customer needs. This will increase the bonding between you and your customer and you will be able to serve your customer better in providing data mining services.

Insert the collect information in a desktop database. More the information is collected you will find that you can prepare specific templates in feeding information. Using a desktop database, it is easier to make changes later on as and when required.

Maintaining privacy

While performing, it is essential to ensure that you or your team members are not violating privacy laws in gathering or providing the data information. Once trust is lost, you may also loose the customer, because trust is the base of any relationship, let it be a business relation.

Article Source: http://EzineArticles.com/5416129

Note:

Delta Ray is experienced web scraping consultant and writes articles on Extract Amazon Website, Product Details Scraping, Amazon Product Scraping, Linkedin Email Scraping, Screen Scraping Services, Yelp Review Scraping and yellowpages data scraping etc.

Rocket clones Amazon in Indonesia

Updated: Rocket Internet, Berlin’s incredible cloning machine, is certainly making good on its international expansion plans. And hey, why not borrow extensively from Amazon and its old site design, right?

That, as TechBerlin neatly spotted today, is exactly what the Samwer brothers’ operation has just done. The site’s called Lazada and it’s now open for business in Indonesia, selling… well, pretty much what Amazon sells.

A job ad that went up on Monday for a senior HR manager confirms it’s a Rocket enterprise, while describing the parent company in a way that almost rings true:

Our team comprises of highly entrepreneurial individuals from the best business schools and companies around the world. This is an incredibly rare opportunity to work for a highly reputed international company, which offers you a challenging, but also fun working atmosphere.

The first bit sounds right, but what comes afterwards depends on your definition of “highly reputed” and “fun.” I don’t know, is being told to sign your business plans in blood fun? Maybe for some.

TechBerlin pegs ex-McKinsey man Maximilian Bittner as Lazada’s CEO, which squares up with a recent edit to his LinkedIn profile. And, since you ask, Amazon is not currently itself operational in Indonesia.

Source: http://gigaom.com/2012/03/22/rocket-clones-amazon-in-indonesia/

Note:

Delta Ray is experienced web scraping consultant and writes articles on Extract Amazon Website, Product Details Scraping, Amazon Product Scraping, Linkedin Email Scraping, Screen Scraping Services, Yelp Review Scraping and yellowpages data scraping etc.