The news: Amazon posted a net loss of $2 billion in Q2 but still beat expectations, helped by strong sales growth in its North American business and improved productivity across its fulfillment network.
The numbers: Amazon’s net sales rose 7% year-over-year (YoY) to $121.2 billion, per its earnings statement, but higher fuel, energy, and transportation costs ate into profits.
Ecommerce adoption slows: While Amazon, like other online retailers, benefited from the shift to ecommerce during the early pandemic, the company has been forced to adjust as consumers swing back to in-store shopping.
Prime Day round two: To juice growth, Amazon is leaning hard on its Prime service. The company is planning a second Prime Day in October, per an Insider report, which will help it get an early advantage in advance of the holiday season.
A dominant force: Amazon has enough market power across multiple categories to keep it relatively insulated from the effects of a spending slowdown. It’s the largest online marketplace in the US by a wide margin: This year, we expect Amazon to account for 72.2% of all US marketplace sales.
The big takeaway: Amazon’s decision to add another Prime Day is a savvy one, as it allows the ecommerce company to drive both sales and ad revenues while keeping Prime members loyal. However, with antitrust activity beginning to center on the core of Amazon’s business, the company may be forced to make changes that are less beneficial to its bottom line.
11 Times SquareNew York, NY 100361-800-405-0844