/>
X
Business

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

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.
Written by Larry Dignan, Contributor

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.

Editorial standards