The pandemic brought significant growth for the e-commerce market as a whole. Amazon (NASDAQ:AMZN) is one of the most successful examples to reference.
Nonetheless, the company has been open in the past regarding how much of a struggle this has been. To simply put it, keeping up with the numbers has taken lots of effort. And massive amounts of money.
With this knowledge, plus the holiday season being just around the corner, we had to ask ourselves the following question: Can Amazon take the burden of the upcoming demand?
The ongoing stress has not slowed Amazon down
For those unfamiliar with Amazon’s most recent ventures, here’s a quick recap. Going back to the beginning of the pandemic, the company saw itself need to prioritize the essentials.
- Creating appropriate working conditions for every warehouse.
- Increasing the size of its workforce
- Working on better incentives for retaining employees
- Developing better delivery strategies.
- And lots more.
This last year saw Amazon drop from an operating income of $6.2 billion USD to $6.0 billion USD. Very likely due to increased operating costs.
For some, this might be enough reason to worry. But it shouldn’t be. Even if the company is burning through more cash than it used to, it has effectively kept up with the demand.
Plus, if you add that more people than ever are doing their shopping online, Amazon could very easily recover that money with the holiday season’s additional customers.
In essence, their elevated operating costs are what help Amazon keep itself grounded. So yes, it is more than likely that the company will manage the holiday season effectively—both financially and operationally.