EcommerceBytes-NewsFlash, Number 2027 - April 24, 2009     1 of 4

Amazon.com Sales Up 18% in First Quarter 2009

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Amazon.com announced financial results for its first quarter ended March 31, 2009. Net sales increased 18% to $4.89 billion in the first quarter year-over-year, and net income increased 24% to $177 million. Worldwide unit growth was 30%. Active customer count exceeded 91 million, up 16%. Worldwide active seller accounts were more than 1.6 million, up 19%. Third-party seller units were 32% of total units versus 30%. Worldwide gross profit was $1.15 billion, up 20%.

North America segment sales were $2.58 billion, up 21% from first quarter 2008. International segment sales, representing Amazon's U.K., German, Japanese, French and Chinese sites, were $2.31 billion, up 15% from first quarter 2008.

Worldwide Media sales grew 7% to $2.72 billion, compared with $2.54 billion in first quarter 2008. Worldwide Electronics & Other General Merchandise sales grew 38% to $2.05 billion, compared with $1.48 billion in first quarter 2008, and increased to 42% of worldwide net sales compared with 36%.

Items shipped on behalf of sellers who utilized Fulfillment by Amazon increased by more than 300% from the prior year.

Link to Amazon Press Release

Link to conference call transcript on SeekingAlpha

Interesting quotes from Amazon CEO Jeff Bezos during conference call:

Jeff Bezos talked about the benefit of Fulfillment by Amazon (FBA) to sellers: "as soon as a seller switches to using fulfillment by Amazon, all of their products become eligible for Amazon Prime just as if they were Amazon owned items. So the interaction between those two programs is driving sales for sellers and that is something of course that sellers want. That's in large part what is driving the uptake of Fulfillment by Amazon." (Amazon Prime is a $79 membership program that gives consumers "all-you-can-eat" fast shipping for eligible purchases. So consumers using Prime who purchase an item from a seller using FBA do not pay any shipping costs for that item. Of course, while conversions increase, sellers must eat the shipping costs.)

Bezos also answered a question about how Amazon.com guarantees the customer experience in third-party merchant sales: "there are a couple of ways. One, we maintain score cards on the sellers and the sellers are very interested in self improvement. The fact of the matter is, the vast majority of sellers do a very good job fulfilling for customers and the small fraction that do not, we can provide them feedback and we can ultimately ask them not to sell on Amazon.

"The second thing we do is we have the AZ guarantee so ultimately we can take care of customers if the seller cannot. And then third, we have fulfillment by Amazon so fulfillment by Amazon really levels the experience and makes it so that those third parties sold items have exactly the same fulfillment and customer service experience as Amazon owned inventory."

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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