Jeff Bezos says Amazon will fail and go bankrupt one day

[Matrix]

 

 

Forward-looking: Being the richest person in modern history and the head of a company worth almost $1 trillion, you might imagine that Jeff Bezos feels pretty confident about Amazon’s long-term future. But surprisingly, he believes that the retail giant will one day “fail” and “go bankrupt.”

During an all-hands meeting last week in Seattle, an Amazon employee asked Bezos what he had learned from the recent bankruptcies of Sears and other large retailers.

“Amazon is not too big to fail,” Bezos said, in a recording of the meeting acquired by CNBC . “In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”

Bezos added that Amazon needed to delay the beginning of the end by continuing to focus on its customers, not the business itself.

The CEO’s words arrived just before Amazon announced the two locations—Long Island City, New York, and Crystal City, Virginia—for its second headquarters, dubbed HQ2. The new offices will see around 50,000 new workers added to the firm’s staff.

But some Amazon employees worry about the rate at which the business is growing. It now has over 600,000 employees and a stock price that’s quadrupled over the last five years. It also leads the way in the cloud industry with AWS. Such growth and influence have led to concerns over a future filled with government regulations and potential antitrust violations. But it doesn’t seem to have Bezos overly concerned.

“It’s a fact that we’re a large company,” said the CEO. “It’s reasonable for large institutions of any kind, whether it be companies or governments, to be scrutinized.”

There’s also President Trump’s dislike of Bezos to consider. Back in March, the company’s value dropped $53 billion following a report that Trump was “obsessed” with the retailer. His administration is said to be looking into antitrust violations by Amazon, while regulators in Japan and Europe are doing the same.

It’s certainly interesting to hear Bezos’ thoughts, especially as Amazon, which is expected to be behind 48 percent of all online sales this year, looks like an unstoppable behemoth right now, even with the antitrust investigations. But few companies can go on for over a hundred years, though, as Bezos notes, the main exception to that rule are breweries.

 

Source

[luisam]

Sears, Roebuck and Company, colloquially known as Sears, was an American chain of department store founded in 1893. Sears had the largest domestic revenue of any retailer in the United States until October 1989, when Walmart surpassed it. In 2018 Sears still was the 31st-largest retailer in the United States. After several years of declining sales, its parent company filed for Chapter 11 bankruptcy on October 15, 2018.

 

Radio Shack has a similar sad story. It was founded in 1921. Climbed to it's highest moments in 1977 when introduced the TRS-80, one of the first mass-produced personal computers with sales of the initial, primitive US$600 TRS-80 exceeding all expectations despite its limited capabilities. This was followed by the TRS-80 Color Computer (curiously, running  Microsoft Basic) in 1980, designed to attach to a television.   Poor compatibility, shrinking margins and a lack of economies of scale led Radio Shack to exit the computer-manufacturing market in the 1990s after losing much of the desktop PC market. At its peak in 1999, it operated stores in the United States, Mexico, United Kingdom, Australia, and Canada. On February 5, 2015, the company filed for Chapter 11. By then, it was operating only in the United States and Mexico. The following month, General Wireless purchased the assets of the company. General Wireless filed for bankruptcy in March 2017. 

 

You may find hundreds of similar cases, maybe some even more emblematic.

 

So, as worldwide commercialization schemes and standards change, at some moment Amazon might find itself unable to adapt and fail!

[BimBamSmash]

I am not surprised. I have heard on many occasions that despite their public image, firms like Amazon are always struggling to be profitable. They can only survive as along as they can grow, and company growth comes at a cost that makes it quite a challenge to stay profitable each month. Lots of exaggeration there, no doubt. But I don't think the concept is entirely wrong.