4 years ago
robertr
in English ยท 2,862 Views
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Amazon Doesn't Have to Be Profitable
The extremely popular mail order service amazon.com doesn't make a profit. They invest all of their revenue on capital expenditures oriented toward future business. You would think this would mean that someday they would have to stop and transition from a high growth to a high profit company. However, they don't technically need to (though the shareholders may demand it). This is because spending on capital doesn't mean the profit is gone, it just means that its being used. You can still sell the warehouses, robots, and anything else that the revenue was used to purchase.
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