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Amazon to $800 in 2014

Stocks in this article: AMZN

NEW YORK (TheStreet) -- Here are the only metrics that matter with respect to (AMZN):

  • More than one million customers around the world became new Prime members in the third week of December.
  • The entire 2013 holiday season was the best ever for Amazon, with more than 36.8 million items ordered worldwide on Cyber Monday, which is a record-breaking 426 items per second...

Those numbers, reported last week by Amazon, blew minds. Every time I revisit them, mind blown again. Yet, some of Amazon's critics have the nerve to criticize the amount of money the company spends to run the business. These are the types of people who would be first in line to complain if their package didn't arrive on time.

Or if the Amazon site crashed. Or if overwhelming demand forced it to stop taking orders. Or if it allowed a credit/debit card breach that impacted 40 million customers.

It's simply staggering that Amazon can fulfill that many orders. More than 400 per second on Cyber Monday. It's just insane. And it more than justifies the fact that, in the third quarter, Amazon spent almost 35% more on fulfillment than it did in the prior year's quarter ($1.51 billion in Q3 2012 versus just over $2.03 billion in Q3 2013).

So now, vis-a-vis the size of Amazon's opportunity and the investment needed to properly seize it, you don't have to just put your faith in Jeff Bezos (though that's fine by me), you have some sick numbers to support his approach.

Need more? The value crowd likes number talk. Enough color they could choke on it. So fine.

Amazon CFO Tom Szkutak told us on the Q3 conference call exactly how the company was preparing to spend -- even more than usual -- to meet the above-mentioned holiday shopping season demand:

Sure. In terms of Q3 specifically, Q3 just because of the -- as I would call it the Q4 readiness, the seasonal readiness, you see this often in Q3 where both our total and our segment operating profit is lower than other quarters. And that's certainly what you are seeing in Q3 in North America. So that's in terms of the investments we are making to get ready for the season we talked about. You start and just quote the capacity that we are adding certainly in multiple geographies, but certainly in the North America it is impacting that as well. You can see it in our fulfillment line item as a percentage of revenue being up.

Lots of folks chide Amazon for holding conference calls void of useful information. I'm not sure what they want or feel they need. But it inspires confidence to know that Amazon does such an excellent job matching "supply" (in this case, not just inventory, but infrastructure and manpower) to demand.

These guys know their business. They do not exist in oblivion, haphazardly spending their way into trouble. This is not Netflix (NFLX) by any stretch of the imagination.

More numbers? No sweat, bro.

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