>> WELCOME
>> BACK TO CHEDDAR BUSINESS AND
NONPROFIT FELL FOR THE FIRST
TIME IN 2 YEARS LAST QUARTER
ONE-DAY SHIPPING HAS COST THE
COMPANY BILLIONS OF DOLLARS AND
THE COMPANY EXPECTS ANOTHER
EARNINGS DECLINED IN THE 4TH
QUARTER OF
THE YEAR. JOINING US NOW IS TO
KNOW MOBY DIRECTOR AND INDUSTRY
ANALYST AT CFRA TO THAT'S
ALWAYS
GREAT THAT HAVE YOU ON THE SHOW
LOOK WE KNEW ONE-DAY SHIPPING
FOR PRIME MEMBERS WITH BEING
CREDIT EXPENSIVE AT THE
SAME TIME. WE ALSO KNOW THAT
AMAZON IS A COMPANY THAT HAS
A HISTORY OF INVESTING IN ITS
OWN COMPANY DELAYING PROFITS IN
PUTTING OFF ROBERTS, SOME CASES
FOR FOR DECADES AS AMAZON HAD
DONE FOR 20 YEARS
OF EXISTENCE. WHY IS THIS SO
SHOCKING TO INVESTORS THAT I
THINK WHAT WE SEIZED EVERY TIME
TO HAVE
INVESTMENT CYCLE.
>> YOU KNOW PRIMARILY DUE TO
THE ONE-DAY SHIPPING UM YOU
KNOW, SO WE KNEW COMING INTO
THIS Q 3 THAT IT WAS GOING
TO BE YOU KNOW HEAVY SPEND IN A
MEAN IF YOU REMEMBER TO 2 IS
SPENT
MILLION TO LAUNCH THIS
INITIATIVE TO 3 WOULD BELIEVE
THAT NUMBER WAS WAS HIGHER IN
THE FIGHTING TO FOR THAT GUY
DID ALMOST DOUBLE THAT NUMBER
THE GOOD IS THAT THAT SPENDING
BILL AND IT DIDN'T POINT THAT
WE'RE SEEING IS STARTING TO
TRANSLATE INTO ENHANCED
ECONOMICS FOR PRIME MEMBERSHIP,
WE'RE SEEING PRIME MEMBERS WANT
A MORE IN
TERMS OF AND THE VALUE OF THE
ORDERS AS WELL AS THE NUMBER OF
ORDERS SO ALL INDICATIONS POINT
TO THE FACT
THAT THIS IS A LONGER TERM
INITIATIVE THAT WILL HAVE THE
OFFSIDE IN NEW YORK YOU KNOW TO
FOR GUIDANCE WE SAW IS GOING TO
HAVE THE NEGATIVE IMPACT OF
THAT RIGHT TO
SPEND IN. BUT OVER TIME YOU
KNOW QUITE COMFORTABLE THAT IS
REALLY NOTHING TO FUNDAMENTALLY
CHANGE AND
IT FACES AND REMEMBER THIS
ONE-DAY DELIVERY IS COULD BE A
POTENTIAL GAME CHANGER IF THE
KIND OF PULL
IT OFF.
>> A BILLION DOLLARS THOUGH
THEY WANT TO SPEND ON
INVESTMENTS. THIS QUARTER SAID
OBVIOUSLY COMES AT AN EXPENSE,
HOW MANY PRIME MEMBERS ARE WE
LOOKING AT NOW THAT AMAZON
CAN BOAST.
>> WELL, YOU KNOW THE ARMY BUT
REPORT THAT NUMBER BUT WE
BELIEVE THAT NUMBER ACTUALLY
COULD BE YOU KNOW WELL OVER A
125 TO 30 YOU
KNOW GLOBALLY.
>> I'M JUST ONE DAY SHIPPING
BOOST IN THOSE PRIME
MEMBERSHIPS MORE PEOPLE WANT TO
GET ON TO AMAZON PRIME TO TAKE
ADVANTAGE.
>> I THINK IT YOU KNOW BIZARRE
ON IT INFORMATION THAT
WE HAVE YOU
KNOW WE THINK THAT YOU KNOW
THAT IS A CATTLE IS THAT
ENHANCES YOU KNOW THE MOTIVE,
IT'S MORE PEOPLE TO
SIGN UP THAT IMPROVES THE
CUSTOMER IS SATISFIED AN AND
ALSO
MAKES AMAZON EVEN MORE ABLE TO
WITHSTAND THE COMPETITION FROM
THE LIKES OF WAL-MART TARGET
AND ALL THESE RETAILERS THAT
ARE LOOKING TO ONE UP IN TERMS
OF DELIVERY SO THINK ABOUT
DELIVERY NOW AS
NEXT BATTLE FRONT HERE FREIGHT
INTERNET RETAIL. UH YOU KNOW
YOU COME.
>> WHATEVER IS THE QUESTION HOW
IS AMAZON SENDING ITSELF OUT TO
SUCCESSFULLY DO ONE DAY
DELIVERY AT A COST THAT IS
SUSTAINABLE WE KNOW THAT AMAZON
IS
ACTUALLY IN URGING ITS OWN
EMPLOYEES TO LEAVE AMAZON TO
START THEIR OWN DELIVERY
BUSINESS, IT'S INVESTING
HEAVILY IN ELECTRIC VEHICLES TO
TRY TO MAKE THE DELIVERY
BUSINESS.
USING
FUEL FROM BUT HOW IS AMAZON
DOING THIS IN A WAY THAT DOES
NOT RELY ON THEIR PART.
>> YOU KNOW THAT IS NOT THERE
ARE A GREAT QUESTION AND I
DON'T THINK THAT YOU KNOW
THERE'S ANY IMMEDIATE IN A
STRATEGY FOR THEM TO WEAN
THEMSELVES OFF OF THEIR
DELIVERY PARTNERS. I THINK THAT
YOU KNOW HAVING YOU KNOW 3RD
PARTIES AND ALSO THEM RAMPING
UP THEIR A ONE DAY IS NOT
THEY'RE NOT
MUTUALLY EXCLUSIVE. THERE'S A
HUGE APPETITE OUT THERE IN
TERMS OF YOU KNOW THAT THIS
PRODUCT JUST THIS A
2 THREE-DAY ADDED. I'M ALMOST
DONE NOT JUST TO ROUND UP THAT
TRANSPORTATION AND DELIVER IN
TERMS
OF HEADCOUNT SO WE'RE SEEN
MASSIVE BEEN INVESTMENTS
PERSONNEL AND INFRASTRUCTURE
AND LOGISTICS. THEY JUST SPENT
BILLION IN SHIPPING CAUSING Q
IF YOU ADD IN FULFILLMENT AND
SHIP IN.
>> THE OVERALL LOGISTICS
PENNIES NOW WELL OVER A QUARTER
ALMOST A 3RD OF THE
OVERALL REVENUE. I MEAN THAT'S
A YOU KNOW THAT'S MIND BOGGLING
BY ANY MEASURE.
>> SO THE HOLIDAY SEASON
OBVIOUSLY IS GOING TO CAVE OR
AMAZON. THE YEAR INDICATION
SHOW THAT THIS COMPANY IS A
QUICK TO GET THROUGH THE
HOLIDAYS WITHOUT ANY HICCUPS
SIDE DESPITE JUST RECENTLY
ROLLING OUT THE ONE-DAY
SHIPPING.
>> THAT IS THE BIG QUESTION
WHETHER THEY CAN PULL IT OFF IN
TERMS OF THE DEMAND A A WE
RESPECT FOR THE HOLIDAY AH
BUT IF THE PRIME DAY THAT WE
JUST SAW IN THIS SUMMER IS AN
INDICATION I THINK THE COMPANY
SEEMS TO BE QUITE READY.
OBVIOUSLY TO FOR GUIDANCE IS A
LITTLE BIT
CAUTIOUS AND NOT ONLY ON THE
REVENUE SIDE, BUT ALSO ON THE
ON THE OPERATING CONCEPT.
>> SO WHAT'S THE STORY THAT
YOU'RE SEEING FROM THAT YOU
KNOW WHAT IS WHAT IS JEFF BEZOS
WHAT AMAZON ABOUT THE CONSUMER
IN THE 4TH QUARTER THAT PERHAPS
OTHER PEOPLE ARE
IN ST.
>> YOU KNOW I THINK IF YOU LOOK
AT THE OVERALL YOU KNOW RETAIL
MARKETPLACE. THE NATIONAL
RETAIL FEDERATION'S GUIDING
TUNE OF 3 POINT TO
4 POINTS 4 OVERALL EVERY TELL
US A CELL GROWTH
AND HOLLY AND NOW THAT NUMBER
IS ACTUALLY HIGHER THAN THAT
RIGHT NOW WE'VE SEEN
TO THAT THAT GIVES YOU A
LEADING INDICATOR OF HOW A
E-COMMERCE SALES, YOU KNOW
MIGHT BEFALL WHICH IS
TRADITIONALLY PRETTY THE
FOUR-TIME THE TRADITIONAL
RETAIL IN TERMS OF WHAT JEFF
BEZOS SEE THAT THING
WHAT THE FRONT LEAVING THE
EQUIPMENT YOU FORGOTTEN THAT
THEY PUT OUT SINCE TO BE QUITE
CONCERNED AND THEN THEY YOU
KNOW ONE THING THAT YOU KNOW
THEY PUT UP BEFORE AN OFF SITE.
>> SO SHOULD INVESTORS GET IN
THE HEAD SPACE THIS IS A
COMPANY NOW THAT IS COMMITTED
AND FOCUSED ON GROWTH UH
VERSUS PROFITS.
>> YOU KNOW I IT IS KIND OF A
SWINGING
PENDULUM HERE. YOU COMPANY CAN
DIAL UP AND DOWN TERMS OF
INVESTMENT A POTENTIAL IMPACT
INCOME GUIDANCE SUGGEST TO ME
THERE'S A WIRE AND A POTENTIAL
OUTCOMES THAT TALKING ABOUT
SPENDING
BILLION. ALMOST DOUBLE IN THIS
ONE DID DELIVERY THAT THINK
THEY'RE TRYING TO TEMPER
EXPECTATIONS IN TERMS OF WHAT
THE BOTTOM LINE COULD BE SO TO
YOUR QUESTION I THINK THIS YEAR
I WOULD KIND OF LOOK AT IT.
THE POTENTIAL TRANSITIONAL YEAR
POTENTIALLY INTO 1ST HALF OF
NEXT YEAR ON THE GOOD NEWS IS
THAT WHERE I