Proves B2C Can Turn in a Profit

proves B2C can turn in a hit Daniel Thomas Thursday 31 January 2002 09:03 Online retailer virago. coms archetypical profit, announced last week, should be viewed by both pure-play dotcoms and conventional businesses as evidence that consumers have true the Internet as a sales channel and that merchandising online can be profitable, analysts have said. Exceeding its own forecasts as well as analysts predictions, amazon recorded earnings of $5m (£3.5m) for the ordinal quarter of 2001, compared with a net loss of $545m for the same effect in 2000. The company said that lower book prices and cost-cutting measures had helped it to consider profitability. Charles Abrams, an analyst at Gartner, said Amazons move into profit was a boost to e-commerce in general as it has massive been seen as the barometer of online retailing. There was a general feeling that if Amazon failed, the whole idea of selling over the Internet would fail, he said. Now that Amazon has announced its first quarterly profit, memories of the Peapod and Webvan [e-business] failures result fade as businesses. In a weak economy, Amazon increased sales by 15%, Abrams said.

Both pure-play dotcoms and traditional enterprises should view the improved results as evidence of increasing word sense of the online sales channel and of ultimate profitability of selling to consumers online. scarcely he sounded a note of caution, pointing out that Amazons figures were achieved afterward old-fashioned physical restructuring and attention to operations. Amazon incurred charges of $177m for restructuring in the first three quarters of 2001 as it closed two statistical distribution centres and two customer service centres and cut 1,300 jobs. Restructuring is now for the most part complete and charges in the fourth quarter were only $5m. Improvements in inventory control and logistics are as important to dotcom businesses models as they are to traditional business models, Abrams said. Amazon cut inventories by 17.7% over the year... If you want to get a full essay, guild it on our website: Orderessay

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