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Could Amazon become the first $1 trillion company?

By Dan Wilson December 8, 2016 - 11:14 pm

We’re talking market capitalisation. That’s how much a company is valued by the stock market. There’s never been a company valued at $1 trillion but could Amazon become the first before the decade is out? One analyst thinks so.

RBC Capital’s managing director Mark Mahoney provided his “just for fun’ thoughts at the Business Insider annual conference, Ignite.

And it isn’t perhaps as outlandish as you may think (check out his workings below). Amazon has doubled its value in the past 18 months and is worth roughly $360bn. Founder Jeff Bezos recently became the world’s 3rd richest man.

The core ecommerce aspect of the business is in rude good health with Amazon’s own retail business doing well and the third party aspect of operations (where margins are stronger) now accounting for more than half of all sales.

And don’t forget that Amazon Web Services (AWS) is a huge and massively profitable part of the Amazon business that’s growing fast.

The source of disquiet for me will be one shared by many Amazon sellers. Market capitalisation is one thing but will they continue to invest in the basics like customer support? In recent months it’s clear that 3P sellers have been having difficulty dealing with the support teams and service is deteriorating. Such swift growth could suggest that some aspects of Amazon are creaking under the rapidity of expansion.

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  • SAM
    7 months ago

    3P sellers have been having difficulty dealing with the support teams and service is deteriorating, it has not been great but not fatal. They did cost us money when they never got a new release on sale till two weeks after launch.
    We are now down to our last 100 units as we stopped sending stock into Amazon, plus I know I am not the only one.
    Am very sure they may become worth a trillion they offer some excellent services and are very innovative and I am enjoying the Grand Tour, they are the market leaders, they have a vision and invest in their future and think in the long term.
    However we are cutting back our FBA offering right back. To many wholesale companies (who are really now just retail) selling direct, far too little margin, they are not working for us and are not good for our sector, just using the products as Door buster’s selling at a loss.
    Some of the product we stopped sending in we were the only ones with it in the UK and eBay has picked that up. We are switching to merchant so we control our stock and price, we may still use PRIME services if we have exclusive but not at least into well into the summer. The service is excellent for customers (right now) but not so great for many traders bottom line. A fight to the bottom is not good for anyone long term, once you kill the competition where does this leave a market lead economy.
    PLus if anyone is doing their research into 2017 they are some excellent alternatives about to hit the UK market which may suit the small biz seller a lot more. We need the competition in the UK.

  • gary
    7 months ago

    I also have noticed a startling drop in seller support this year. When support do finally pick us a case it’s almost as though it is a primary school kid answering the issue.

    I will not be renewing my Prime membership due to the fact that I can’t find any products sold from anywhere but China anymore. I would rather buy from a UK seller who pays UK taxes which can be invested back into my country.

    Amazon are going full speed with ‘mega globalisation’ which is definitely flowing against the opinions of a rapidly growing discontented nation – not just here but US and many other EU countries.

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