Amazon's Successful Prime Day Is Just Another Reason to Buy Its Stock
Amazon (AMZN) - Get Report is celebrating sales records from its biggest day ever, but it is hard to tell by looking at its stock.
Shares closed slightly lower on Wednesday, but this just provides investors with an opportunity to swoop in and buy the stock before it heads back up.
Tuesday was Amazon's second annual Prime Day, which began last year as a 20th anniversary celebration. The sale featured discounts on thousands of items from hundreds of vendors and was open only to members of the company's $99-per-year Prime subscription service.
Worldwide sales on Tuesday increased more than 60% from last year's Prime Day, with an increase of more than 50% in the U.S., according to Amazon. The company whipped up a shopping frenzy by unveiling deals well into the evening. More than 900,000 televisions alone were sold, as well as more than 1 million pairs of shoes.
"After yesterday's results, we'll definitely be doing this again," said Greg Greeley, vice president of Prime, in a statement Wednesday.
However, the day wasn't without its challenges. First, technical glitches early in the morning caused difficulty for customers in completing their orders. And then e-commerce software provider ChannelAdvisor prematurely announced that Prime Day sales were flat. Of course, that announcement turned out to be untrue, but that didn't stop investors from souring on Amazon's stock.
Besides a tremendous sales rush during the otherwise-sluggish month of July, Prime Day's main goal is to increase the number of Prime subscribers. Although it hasn't released exact figures, Amazon reported that last year's Prime Day gave a significant boost to Prime's ranks.
Prime subscribers are valuable to Amazon, because they spend an average of about $1,200 a year, more than double the average $500 spent each year by non-Prime customers, according to Consumer Intelligence Research Partners. And Prime customers are also loyal, with 91% renewing their membership each year, the research firm said.
Meanwhile, other retailers piggybacked on Prime Day. EBay's Web site boasted deals without membership fees, an obvious jab at Prime's annual membership cost. J.C. Penney attempted to beat the Prime Day rush with a big sale on Monday, touting its "prime deals." Walmart, which is ramping up its own e-commerce efforts in a bid to take on Amazon, waived its $50 shipping minimum.
But these other retailers still can't come close to Amazon's tremendous e-commerce business. The company will continue to rule the roost, delivering profits to investors along the way.
---
Now is a great time to load up on Amazon. But here is a way to make $67,548 per year or more without stocks, just by following this simple step-by-step process. The trader who is sharing this secret has been right more than eight of 10 times, turning $5,000 into more than $5 million. Click here to see how easy it is to follow his lead and collect thousands of dollars in free money every month.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.