Amazon.com Inc., the world’s largest Internet retailer, beat analysts’ first-quarter revenue estimates, led by demand for Kindle devices and a jump in sales for outside vendors through its website.
Net income fell to $130 million, or 28 cents a share, from $201 million, or 44 cents, a year earlier, the Seattle-based company said today in a statement. Sales rose 34 percent to $13.2 billion, compared with the average analyst estimate of $12.9 billion, according to data compiled by Bloomberg.
Chief Executive Officer Jeff Bezos is looking to add customers by pouring money into new versions of the Kindle and warehouses that are equipped to send out products faster. The Kindle Fire tablet is the best-selling item on Amazon’s site, the company said. In the fourth quarter, the company shipped 4.7 million Kindle Fires, giving it 16.8 percent of the market and making it No. 2 behind Apple Inc.’s iPad, according to IDC.
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To bolster profitability, the company is adding more third- party sellers, which generate higher margins, to its website. Amazon logs all of the commission, usually about 10 percent, on any item sold by an outside vendor as profit, and collects fees if the partner elects to fulfill through its chain of warehouses, according to Mercent Corp., a consulting firm that helps retailers improve online sales.
Link to the rest at Bloomberg