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Copyright 2002 CMP Media. A service of InformationWeek.
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** An Amazon First: Profit

Amazon.com Inc. lived up to its promise Tuesday, posting its first
profitable quarter on record sales. The Web's largest retailer eked out a
net profit for the fourth quarter ended Dec.  31 of $5 million, or 1 cent
per share, when tallied by traditional accounting principles. A year ago,
Amazon suffered a fourth-quarter loss of $545 million.

The Seattle company also posted a pro forma profit of $35 million, or 9
cents a share, compared with a pro forma loss of $90 million, or 25 cents
per share, in the same quarter last year. The profits were driven in part
by selling a record $1.12 billion worth of merchandise.

The biggest reason for the turnaround is improved fulfillment processes,
Amazon CFO Warren Jenson said during a conference call. Amazon operated
two fewer distribution centers this year compared with a year ago and
employed 4,000 fewer people in its fulfillment centers. Improved
self-service tools reduced customer contacts per order by a third;
shoppers contacted Amazon about half as many times about the whereabouts
of their orders.

Amazon also reduced the amount of time inventory sat in a warehouse by 38%
quarter to quarter, cutting costs further. Said Jensen, "Inventory
improvements were driven by better allocating inventory across the
network." - Christopher T. Heun

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For more, see:
Amazon Says It's Spending Less On IT

John Webb
Assistant Director for Collections and Systems
Washington State University Libraries
Pullman, WA 99164-5610
509-335-9133    FAX 509-335-6721