Friday, December 26, 2008

Amazon Touts "Best Ever" Holiday Season. Updated

Most of you know I am a huge fan of Amazon.com. I believe they had a very solid holiday season, but I have to chuckle a little about today's press release: Amazon.com's 14th Holiday Season Is Best Ever

In reality, their sales could have been up 1% over last year (their previous best year ever) and that statement would still be accurate. Last year they said the same thing. Amazon.com Wraps Up Its 13th Holiday With Best Season Ever and the year before Amazon.com's 12th Holiday Season is Best Ever and ... well you get the picture. 

So after we forgive the PR department for hyperbole, let's take a look at some of the numbers in light of the current economic news.
  • 2008 - Amazon's Peak Order Day was Dec 15th with 6.3 million orders placed, which was up 17% over 2007's Peak Order day of Dec. 10th and 5.4 million orders. 17% growth Y/Y on the peak day is pretty impressive, especially in this economy.

    It is interesting to note that Amazon's 2008 peak order day was so late in the season, only allowing 9 days for orders to arrive in time for Christmas. In 2007 the peak day was Dec 10th; in 2006 it was Dec. 11th and in 2005 it was Dec. 12th. Perhaps Amazon Prime had some impact on customers waiting until the 15th to order.

  • On the peak day this season, Amazon's worldwide fulfillment network shipped over [5.6]million units up [44%] over 2007's 3.9 million orders. That growth is very impressive and the increase may have been favorably impacted by Amazon's FBA program where they warehouse and ship product for 3P merchants.
While these numbers are just a snapshot of Amazon's 4th quarter, they do show significant growth while the rest of ecommerce is contracting

Now I'm just waiting for eBay's press release on their holiday season. :)

Just my 15%

19 comments:

Anonymous said...

What I would love to see here is some seller experiences this Holiday Season with Amazon. We had started selling on Amazon and stopped as we had a few issues and are starting on Amazon again.

We sell our own brands so there are few more hoops to jump through for us getting products listed, etc.

Any insights, tips, work-arounds, stories, etc. would be great.

nadine said...

Can't wait for eBay's spin. Spinning is one of their true core competencies, so I'm expecting something good.

I noticed that Motley Fool just ran an article on eBay called "The Fall and Fall of eBay" http://www.fool.com/investing/general/2008/12/26/the-fall-and-fall-of-ebay.aspx

Until recently, Motley Fool was quite positive about eBay. But even the fools are wising up now.

Randy Smythe said...

Anonymous,

I will be soliciting info from readers beginning next week, hopefully we will get some good stories.

I will be doing a rundown on my sales after the 1st.

Anonymous said...

Amazon and specifically Amazon Fulfillment saved our Christmas. Last year sales on eBay and Amazon were about equal. This year it was 5 to 1 Amazon.

FBA sales were very good for most items. There were some items where Amazon under priced us by a large amount and we weren't able to sale any of those items. This is our only drawback from using FBA as sales can stop immediately when Amz lowers their price to below cost.

Randy Smythe said...

Anonymous,

Good to hear. I agree with you about FBA and when Amazon discounts substantially. That is why I am working on expanding sales to other channels using FBA.

I'm working with a couple of software vendors to manage FBA inventory over multiple sales venues. I'll let you know how that progresses.

nadine said...

"manage FBA inventory over multiple sales venues"

Randy, could you explain how this works? Amazon will fulfill orders for other vendors? Besides the shop you buy from Amazon? How does this work?

Randy Smythe said...

Nadine,

I am aware of two separate software vendors who are working on solutions to use FBA as a central hub for inventory and manage sales on multiple venues like eBay, Amazon, Buy.com webstore and International venues.

Basically you ship your inventory to Amazon's FBA warehouse and then list that inventory wherever you choose. When there is a sale on one marketplace it decrements inventory and manages the fulfillment of that order.

You can do this manually right now but it is a chore.

It would be ideal for me as i don't want to hire a fulfillment staff and lease warehouse space. With this approach, I just have to get inventory to Amazon FBA and I can manage the sales over multiple marketplaces.

Hope that makes sense.

Janez said...

Randy,

Would Channel Advisor be one of those companies? Christmas Day was the first time that our Amazon sales exceeded Ebay. We have about 3 times more inventory on Ebay. I'm a true believer that Ebay is in big trouble. 2009 will be the year we focus on our other channels.

Thanks,
Janez
www.sportingup.com

Randy Smythe said...

Janez,

I don't think CA is working on an FBA program just yet but I'll email Scot and see.

Anonymous said...

We currently carry about 200 SKUs on FBA however it appears that the Eligible for Prime logo will only appear for featured merchants trying to understand why?

Randy Smythe said...

Anonymous,

That shouldn't be happening. I only sell media items so I'm not sure about the other categories but your should get eligible for Prime as long as you are FBA.

eMail me and I'll try and figure it out. rksmythe at yahoo

Anonymous said...

After some help from Randy S., we were accepted into a closed category in Amazon and then proceded to make very slow sales progress over the last 6 months. Slowly but surely our sales have picked up to now 30% of our ebay volume. Each day that goes by we sell more on Amazon. We hope 2009 will prove to be the year that we fianlly get off of the ebay crack. We will continue with our Amazon sales but more importantly its time to ramp up our own websites and diminish the dependency on 3rd party sites. I have read so many posts about taking back control of your business and the fresh breath of air that comes with. Ebay has been undue emotional stress, hopefully Amazon wont go down the same road but if it does, me and my company will be ready this time. THANK YOU RANDY!

Happy Holidays to ALL.

(in fear of ebay retaliation, I remain anonymous)

Randy Smythe said...

Thanks Anonymous,

You just made my year!

It is stories like yours that make this all worthwhile for me.

pat said...

Do yourself a favor and take the time to look at the half-full side of Ebay:

…Online auctions in a recession.

…People pulling things out of their closets, basement to attic, jewelry cases - and trading collectibles.

…People who want (or need) to cash in unwanted Christmas gifts. Ebay is the largest online “Let’s make a deal” there is. And it’s happening as we speak.

…With all with Video Doctor pulling a growing market of needy people into the largest sales opportunity available today. …The online marketplace.

Many sellers would give up 33.33% if they have to - and call it fair!

…Recent reports bashing Ebay are highly suspect of manipulative intent. It’s either that …or unbridled ignorance. The Ebay business model grows a marketplace of online collectors, trading in the world’s largest “Let’s make a deal.” This marketplace will never go away. It favors retirees as well as the recently unemployed. It is poised for exponential growth. And it will never go away. In my book, long-term, that makes Ebay a safe-haven stock, as well as a growth opportunity (@ 9/1 PE!).

…Like any hugely profitable and successful company (and this one must deal with both sides of buyer and seller) they have a darkside. On the bright side we will soon see Ebay surging ahead on a recession-fueled relaunch of its core business, to a new plateau higher than before - with PayPal and Skype sweetening the ride.

Ebay is a recession-driven business in a growing market. Will Ebay management not realize the ride they are on? It doesn’t matter. The outcome is $eriou$ $$$$, with the price soon closer to $31 than $13.

And all the bashing or pumping in the world will not change it.

That’s all I know; and some I made up. Get long or get wrong.

Anonymous said...

I want some of what Pat has been smoking.

Anonymous said...

Well- that sure ain't Mizz Pat, I can tell you that.

nadine said...

No, it's definitely not Ms. Pat!

This new Pat does have one good point - eBay is still the top dog in the antiques and collectibles market. But that hardly means that the business is healthy or that it isn't degrading. But projections of eBay's quick demise forget, I think, how big and rich eBay is. Even on the internet, failure can take quite a while when you are that big, esp. when you are still in a "Snow White vs. the Seven Dwarves" position vis-a-vis the competition.

Anonymous said...

little pat: " Will Ebay management not realize the ride they are on? It doesn’t matter. The outcome is $eriou$ $$$$, "

Not with best match it ain't, you better get your hiney to a board meeting and tell those people what time it is. Because management realizing this strength DOES matter. They are squelching small folks (and turning away FVF's) at a furious pace, in what universe does that produce profits? You buy ebay stock the day before it breaks up, no sooner.

What pat is saying, though, is that in times like these you don't want to be Apple Inc you want to be the electric company:

Plugged into everyone, just a utility, no growth, just plopping along and gettin' them bills out. That was ebay's forte. It's what they need to be doing NOW.

Without genuine, true-blue kitchen table sellers, ebay ain't NUTHIN'. And BTW when ship rates go up 20% AGAIN in Q1 '09, retail on ebay will find it that much harder to move stock- especially the buy.com shelfworn, discount JUNK that was formerly dumpster-bound.

Happy New Year JD, how's that recession treatin' ya. Quick, duck into the broom closet- board member at 12 o'clock... you owe me one.

sysacad said...

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