Amazon: On track for $100 billion in revenue in 2015

Amazon: On track for $100 billion in revenue in 2015

Summary: Amazon is likely to hit $100 billion in annual revenue and is on a growth path that eclipses the world's most successful retailer---Wal-Mart. Here's a look at a few ways Amazon will get there.

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Amazon is likely to hit $100 billion in annual revenue and is on a growth path that eclipses the world's most successful retailer---Wal-Mart.

That revenue projection comes from Morgan Stanley analyst Scott Devitt. In a large research report that emphasized that Amazon has plenty of runway left for growth, Devitt made the following points:

  • Amazon can fuel growth just by taking wallet share from its existing customers. Amazon's 121 million customers spend about $275 a year. Wal-Mart's 300 million customers spend $750 a year excluding groceries and Sam's Club.
  • International expansion continues.
  • New efforts such as Amazon Web Services and digital sales via the Kindle platform are promising.
  • Subscription e-commerce for grocery staples is another promising avenue. I've been experimenting with subscription groceries for things like tea and cereal. Overall, Amazon's pricing needs to come down a bit vs. Wal-Mart---based on my informal Dignan Go Lean and Frosted Flakes cereal index---but scale should help that.

Here's the money chart via Morgan Stanley.

Other odds and ends from analysts upbeat about Amazon.

  • Jefferies analyst Youssef Squali reckons that Amazon sold 4 million Kindles in the fourth quarter. Amazon should move about 10 million Kindle devices in 2011.
  • E-books should generate $184 million in sales for the fourth quarter, said Squali.
  • Fulfillment center expansion at Amazon has focused on dry packaged goods and home and garden. These untapped categories can fuel growth in upcoming years, said Squali.
  • Based on Amazon's fourth quarter actual peak orders, which were up 44 percent from a year ago, Amazon's revenue should be about $13.05 billion, said Piper Jaffray analyst Gene Munster.

Topics: Enterprise Software, Amazon, Banking

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12 comments
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  • RE: Amazon: On track for $100 billion in revenue in 2015

    Good for them. And for us. Amazon and Ebay contribute to efficient markets (in economic terms). This is best for buyers and sellers.

    They also have helped globalize the wealth and availability of products.
    Schoolboy Bob
  • RE: Amazon: On track for $100 billion in revenue in 2015

    They will probably go further. I cannot think of shopping without Amazon. I hate going to the stores.
    bivariate
  • RE: Amazon: On track for $100 billion in revenue in 2015

    I'm not sure it's technically fair to compare Wal-Mart and Amazon Fresh at this point. For one thing, Amazon Fresh only delivers in Seattle right now where:
    A.) Grocery prices are already high compared to much of the rest of the country
    B.) There is only one Walmart and it is right on the edge of city limits- way too far for most people to go just for groceries.

    Walmart is simply not a main competitor in Amazon Fresh's core geographic right now. Would be better to compare to Safeway or QFC, in that sense.
    saraithegeek
  • Amazon

    This is in part because the Amazon Support is AMAZING. Client is always right with them, they are fast, efficient, professional and provide state of the art solutions. Better prices, good shipment policies, extreme a-z warranties, etc. Good amazon!!
    alexisgarcia72@...
    • RE: Amazon: On track for $100 billion in revenue in 2015

      @alexisgarcia72@... "Amazon Support is Amazing..."

      Yes "Amazingly bollocks". You need to exchange about 3 e-mails over a week before the retard on the other end understands what the actual issue is, despite it being written down in clear English with order references. Suspecting a monkey service factory in India somewhere....

      Their performance over Christmas is usually pretty piss poor, and their introduction of 'Black Friday Deals' to the UK this year exposed their marketing people as nothing but SnakeOil salesmen - peddling deals no-one could actually get their hands on.
      neilpost
      • RE: Amazon: On track for $100 billion in revenue in 2015

        @neilpost - yikes. Where's the disagree button? :-)
        SeattleGuy1
  • Question: Are those sales for Amazon the company, or for all the vendors

    under the Amazon umbrella?<br><br>If it's under the umbrella, then it would be like comparing Apples and rocks. Two different entities altogether.
    adornoe
  • RE: Amazon: On track for $100 billion in revenue in 2015

    Tripling turnover in 3 years..... to $100bn. Hardly plausible.

    They'll have a market valuation of $900Trillion dollars next, because some moron @ Goldman Sachs, who can't 'make an honest buck' on sub-prime mortgage Special Investment Vehicles any more, have invested $50 bucks and vomited the story into Fox News.
    neilpost
    • RE: Amazon: On track for $100 billion in revenue in 2015

      @neilpost - you sound like the people that said "Amazon turning a profit? Hardly Plausible" about 6 or 7 years ago. :-)
      SeattleGuy1
  • RE: Amazon: On track for $100 billion in revenue in 2015

    Great article! This comparison has peaked my interest in the past, and I actually wrote a blog post last year that graphed out both of their revenue growth figures based on the 2009 numbers. Looks like the 2015 / $100 billion + mark matches my projections as well.

    Read this blog post if you get a chance...it's interesting to see this revenue growth trends charted in graph form.

    http://www.straightupsearch.com/search-marketing/amazon-vs-walmart-the-epic-battle-wages-on/
    LL - sodoit
  • RE: Amazon: On track for $100 billion in revenue in 2015

    Amazon will struggle with this pace. The company retention of it's managers is horrible. The average manager does not last past two years. With the grow that is predicted the retention of qualified managers is needed. The 100 billion mark Amazon will need to grow it's apparel, shoes, and health departments on top of retaining talent. There is a popular saying at Amazon...

    "We have a high hiring bar, but a low retaining wall.."
    brosiph
  • RE: Amazon: On track for $100 billion in revenue in 2015

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