Menu
Three Breast Woman Jasmine Tridevil is a Hoax

Three Breast Woman Jasmine Tridevil is a Hoax

iPhone 6 Plus Has Not the Best Smartphone Screen

iPhone 6 Plus Has Not the Best Smartphone Screen

Amber Heard Topless Photo Leaked

Amber Heard Topless Photo Leaked

Kim Kardashian Leaked Photos Backlash

Kim Kardashian Leaked Photos Backlash

Stephanie Beaudoin Dubbed Worlds Hottest Criminal

Stephanie Beaudoin Dubbed Worlds Hottest Criminal

Why Amazon Is Going After Publisher Profit Margin

Jun 16 2014, 1:55pm CDT | by , in News

Why Amazon Is Going After Publisher Profit Margin
 
 

YouTube Videos Comments

Full Story

Why Amazon Is Going After Publisher Profit Margin

When compared with other kinds of companies, book publishers do just okay in terms of profit margin. According to a recent analysis by industry publication Publishers Lunch, the largest worldwide book publishers have roughly a 10% profit margin.

Compared to other industries, that’s just about middle of the pack. A 2012 report from Business Insider analyzed profit margins across industries in the S&P 500 equities index. A general “media” category was pegged at about 10% net profit. Software, pharmaceuticals, semiconductors, oil and gas led the way with margins between 15% and 20%. The lowest-margin industries were retail, with margins closer to 3% or 4%.

That takes us to Amazon, which had about $74 billion in sales and a profit margin last year of 0.37%. Not only is that much less than book publishers, for which it generates a large percentage of business, but also less than Amazon’s peer companies — or those it would consider peers: Apple, Facebook and Google.

Last year, Apple had a 22% margin on about $171 billion in revenue. Facebook had a 19% margin on nearly $8 billion in revenue. And Google had a 21% margin on about $62 billion in revenue. Along with Amazon, each of these companies have been stock market darlings. (Wal-Mart, which is perhaps a more direct competitor to Amazon, has a profit margin more in line with Amazon’s and the retail industry in general: 3.3% on $476 billion last year.)

What confounded some analysts was investors’ faith in Amazon despite it relatively small profits — both compared with its partners and its competitors. This year, investors may be signalling to Amazon that it’s time to increase profits — and one way for a retailer to do that is to get better terms from its suppliers.

While Hachette’s low double-digit margins and roughly $300 million in income won’t solve Amazon’s profit margin problems, it could help. And if Amazon’s thousands of other suppliers started to cede some margin to the largest e-commerce company in the world, it could add up.

As Amazon founder and CEO Jeff Bezos has famously said, “your margin is my opportunity.” There are a lot of companies out there that Amazon partners or competes with that have “opportunity” to spare.

More on publisher profit margins.

 

You Might Also Like

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Lauryn Hill&#039;s Performance in London Booed By Fans
Lauryn Hill's Performance in London Booed By Fans
After a 90 Minute Wait an Angry Audience Takes to Social Media to Complain.
 
 
Kate Upton Makes Shoe Commercials Sexy
Kate Upton Makes Shoe Commercials Sexy
Kate Upton got hacked and very private photos leaked on 4Chan. The show must go on though. Kate Upton stars in a new shoe ad.
 
 
Eva Mendes In Business Despite Baby
Eva Mendes In Business Despite Baby
While Eva Mendes recovers from giving birth to her baby daughter, her Fall fashion gets strutted on the runway.
 
 
Kendrick Lamar Has Released His New Single Entitled “i”
Kendrick Lamar Has Released His New Single Entitled “i”
Kendrick Lamar has released his first single since 2012.
 
 
 

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.