Amazon stocks 1 million unique products in inventory, whereas grocery stores stock roughly 50,000, and supercenters stock around 125,000. What’s more, Amazon sells out its entire inventory 14 times per year, which is more than Costco (Nasdaq: COST), Wal-Mart, and Best Buy (NYSE: BBY), whose inventory turns are 12, eight, and eight times.
Furthermore, Internet real estate doesn’t require Amazon to make monthly lease payments. But Amazon, in turn, can collect rent from other retailers by “renting” out its virtual real estate. In fact, Amazon made roughly $3 billion last year, or 30% of sales, from outside sellers by “renting” out its Internet real estate to third-party sellers.
Amazon is a very interesting stock. It is not cheap (on a PE basis) and trying to evaluate what the earning picture will look like going forward is not easy. This article does a good job of looking at some of the interesting questions.
Related: 10 Stocks for 10 Years Update – Amazon Innovation