eBlog - Amazon's Q3 earnings release is the most interesting in 2 years

If you’ve been sleeping under a rock this past week, you may have missed one of Amazon’s most interesting earnings release in a couple of years. Here are the three things you need to know.

1. Amazon’s focus on profit (vs. growth) is working… too much, and it’s making them seem not so customer-centric anymore. (We Amazonians have always had a tendency to over-correct.) In Q3, Amazon missed revenue by nearly $1B, mostly driven by lagging retail sales. On the flip side, they exceeded profit estimates, coming in at $3.72B and up nearly 10x Y/Y, largely driven by improvements to North American profits.

What drove the revenue miss and (rather significant) profit gain? For the revenue miss, some analysts say it was due to Diwali falling more squarely into Q4, some say the Souq acquisition. For profit, some say impact of increased advertising revenue and impact of tariffs. My opinion? It’s both the ad platform (see #2 below) and their relentless focus on CRaP out and improving terms, typically at the expense of growth and usually at the expense of the customer experience. Every manufacturer we work with is feeling the squeeze, and in some categories, the #1 and #2 vendors (both!) had 50% of their assortment crapped out. How is this good for the customer again, Amazon? Make sure you prepare for your negotiations this year, brands…