Amazon doubles deliveries in 2016 for third-party sellers
Amazon.com Inc (AMZN.O)
shipped 50 percent more items during the past holiday season than the prior
year for third-party vendors and doubled the amount for 2016 overall, the
world's largest online retailer said on Wednesday.The
data may offer hope to investors looking for Amazon to post a fourth-quarter
profit when it announces results in the coming weeks.Seattle-based
Amazon, known for its roller-coaster results in years past, had forecast that
operating income would range from zero to $1.25 billion in the fourth quarter.
The company said spending on warehouses and video production would drag on profits.Shares
were up 0.6 percent at $758.48 in afternoon trading.Amazon
said the 2016 holiday was its best-ever shopping season. But this was expected,
said analyst Jan Dawson of Jackdaw Research.More sellers are paying the company to store, pack and ship
goods through its fulfillment service. Amazon more than doubled the items it
delivered for other sellers in 2016 from the year prior to exceed 2 billion, a
spokesman said.Active sellers using the fulfillment service rose more than 70
percent in the year, Amazon said. It did not specify the number of vendors or
break down revenue.Amazon takes a cut of third-party sales, which were
"record-breaking" in 2016, Peter Faricy, vice president for Amazon
Marketplace, said in a statement."It's a positive data point, but there may be
offsetting elements that they don't highlight," said BGC Partners analyst
Colin Gillis."The real interesting bit is the lead the company has
built with their Echo devices and home automation," Gillis added. Shoppers
can voice-command an Echo to buy goods online. Amazon's voice-command devices
topped its best-seller list during the holidays.Amazon will likely beat its profit-margin forecast for the
fourth quarter, Morningstar analyst R.J. Hottovy said in a note last week.
Competition on pricing seemed less intense, and Amazon avoided fulfillment
bottlenecks it suffered in 2015, he said.More sellers are paying the company to store, pack and ship
goods through its fulfillment service. Amazon more than doubled the items it
delivered for other sellers in 2016 from the year prior to exceed 2 billion, a
spokesman said.Active sellers using the fulfillment service rose more than
70 percent in the year, Amazon said. It did not specify the number of vendors
or break down revenue.Amazon takes a cut of third-party sales, which were
"record-breaking" in 2016, Peter Faricy, vice president for Amazon
Marketplace, said in a statement."It's a positive data point, but there may be offsetting
elements that they don't highlight," said BGC Partners analyst Colin
Gillis."The real interesting bit is the lead the company has
built with their Echo devices and home automation," Gillis added. Shoppers
can voice-command an Echo to buy goods online. Amazon's voice-command devices
topped its best-seller list during the holidays.Amazon will likely beat its profit-margin forecast for the
fourth quarter, Morningstar analyst R.J. Hottovy said in a note last week.
Competition on pricing seemed less intense, and Amazon avoided fulfillment
bottlenecks it suffered in 2015, he said.According to Amazon, shoppers ordered more than 28 million items
from third-party sellers this year on Cyber Monday, the fourth day after
Thanksgiving, versus more than 23 million a year earlier.The company is assembling its own fleet of planes to
supplement shippers like FedEx Corp (FDX.N) as orders rise.Amazon has loaded the aircraft with big but lightweight
boxes, according to data reviewed by Reuters and interviews with airport
officials around the United States, helping it dodge fees from cargo companies
that are increasingly pricing by volume rather than weight.(Reporting by Jeffrey Dastin in New York; Editing by
Leslie Adler, Jeffrey Benkoe and Bernard Orr)
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