Amazon Prime Day A Long Term Growth Driver

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Did Prime Day Improve The Value Of Amazon Stock?

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24 Jul, 2015

Amazon (NASDAQ:AMZN) sold a blistering 398 items per second on Prime Day; 34.4 million items, which is an 18% greater account than their sales on Black Friday this past year in 2014. Members saved millions of dollars from sales. Yet, reactions in the media from consumers to Amazon Prime day were mostly disappointment.


On an ongoing basis, Prime Day is likely to aid Amazon's results, at least in terms of sales growth. With so many Prime subscriptions being acquired in a single day, Amazon's subscription revenues should get better, with every such event.

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Transcript - Amazon Prime Day A Long Term Growth Driver

There are a few ways to assess how successful was the Amazon Prime Day; a first annual sales event held on July 15th by Amazon.com in the theme of Black Friday.

The way you choose will determine how you value Amazon stock and here are the important ones: The actual sales success of Amazon Prime Day, which was record setting and monumental, the public reception and the media, which is a humorous display of mostly disappointment, and of course how Wall Street took it, and what that means for Amazons already stagnant profits.

Amazon Prime Day is designed to offer great deals in order to hook people on prime subscriptions.

Greg Greeley, Vice president of Amazon Prime stated that hundreds of thousands of new Amazon Prime members signed up on Amazon Prime Day, which is a record setting membership day for Amazon.

Amazon sold a blistering 398 items per second on Prime Day; 34.4 million items, which is an 18% greater account than their sales on Black Friday this past year in 2014. Members saved millions of dollars from sales. Some of the popular purchases were the Fire TV Sticks, selling tens of thousands in one hour; the fastest record selling deal on an Amazon device, 56,000 units of the Lord of the Rings Trilogy set, and 47,000 televisions.

Amazon Prime is a $99 per year subscription offering free 2-day shipping, unlimited streaming of movies and TV shows with Prime Instant Video and Amazon music, and the ability to borrow books from the Kindle Owners' Lending Library. Reactions from consumers to Amazon Prime day were mixed despite its large sales numbers. Users across social media chimed in messages such as: "I was less disappointed when my parents got divorced" and, "I was thinking of having a Prime Day sale this weekend, just to get rid of some old junk."
One of my favorites I found is this tweet by @Stevenkelso,
"50 years from now,"
"Grandpa, what was the most disappointing thing you've ever experienced?"
"Oh son,
*Stares out window*
It was Prime Day"

It should be noted that, Feedback from Amazon sellers was widely positive - as many had record breaking success on Amazon Prime day.

Amazon.com started in July 1995. Twenty years later we find Amazon still driven by consumer obsession, rather than competitor focus. Amazon has pioneered products and services like Customer reviews, 1-click shopping, personalized recommendations, Kindle, Fire tablets and Fire TV. Amazon Stock is up 22% in three months, and the S&P 500 is up only .8% in three. Prime Day's first showing was successful as an operation to increase membership, and generate record breaking sales numbers. It didn't do wild damage on Wall Street, but investors are positive on Amazon already despite their stagnant profits.

Amazon is as long-term as long term gets. We aren't gonna see Amazon stock drop drastically without a warning, but with each year Amazon Prime Day will stimulate the growth of Amazon Prime's membership base. The idea of exponentially multiplying $100 annual subscriptions is very attractive to me.

Ladies and Gentlemen; I am John Summers. If you feel there is anything I've left out, or you have any questions please feel free to get a hold of me or leave a comment. I'd love to hear from you. Thank you for watching, we'll see you next time.

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