It’s that time of year again: Amazon Prime Day.
It’s a day when one of the largest companies in the world offers “special” deals to its Prime members. And if I know anything about consumerism, it’s that everyone loves a good deal.
Amazon.com (NASDAQ: AMZN) has become one of the largest companies at roughly $886.22 billion in market capitalization. Knowing that information, there’s no surprise that it is run by one of the richest people on Earth, Jeff Bezos.
Jeff Bezos founded Amazon in 1994. He later took the company to the public market in 1997, and since then the company has been a powerhouse. It’s shaken up almost every industry in one way or another.
When I got out of college, I worked at an academic publisher, and one of the biggest concerns we had was competing and staying in competition with Amazon when it came to selling books.
In almost every meeting I went to, Amazon was brought up at least once or twice. It was a real concern at the time for book publishers, but now Amazon is a concern for a lot of other companies in different industries as well.
Jeff Bezos is hyper-focused on keeping his company innovative and prosperous, which is good news for any shareholder.
According to a report from Consumer Intelligence Research Partners, nearly half of U.S. households have an Amazon Prime membership, and the number of memberships in the U.S. jumped 35% last year to 54 million.
On May 11, 2018, Amazon increased the price of its Prime membership. New subscribers are now required to pay $119 a year, up from $99 a year.
The last time the company increased membership fees was back in 2014, when the yearly membership fee was $79. An increase after four years doesn’t seem too bad for some people, especially now that there are more incentives that come along with a Prime membership.
One of those perks is Amazon Prime Day.
2018 Amazon Prime Day
This year’s Amazon Prime Day is set to be a big week for the company and its investors. Amazon Prime Day started on Monday, and the deals will keep going on through Tuesday.
Analysts are already expecting record sales numbers from Amazon’s special event for its Prime users, not to mention an increase in Prime memberships, since people will only be able to get the deals Amazon.com is offering if they have a Prime account.
Coresight Research is estimating Prime Day will generate a record $3.4 billion in sales this year, a 40% increase from last year’s $2.4 billion. This 36-hour sales event could be Amazon’s second-biggest sales volume all year after Cyber Monday.
There are a few new sales going on this year that differ from previous years. With the recent addition of Whole Foods to Amazon, the company will be offering special discounts at Whole Food stores.
Stay on top of the hottest investment ideas before they hit Wall Street. Sign up for the Wealth Daily newsletter below. You’ll also get our free three part report, “After Apple: The Next Big Thing in Consumer Electronics“.
As I mentioned earlier, this sale helps bring in more Prime memberships, which is always good news to any company offering a subscription or membership platform to customers. Earlier this year, Amazon reported 100 million global Prime members for the first time ever.
Subscription and membership fees are constant and dependable revenue. If there are more members, then there are more people paying yearly fees. And if there are 100 million global Prime members and they’re paying around $119 a year, that’s a good chunk of change for Amazon.
While everything is looking up for Amazon during its big event, there may be some trouble on the horizon that could have an effect on how successful sales will be this year…
Amazon Employees on Strike During Prime Day
Amazon workers in Spain went on strike on Monday. They picked a day that could directly affect sales and shipping. These workers went on strike to protest their current working conditions at Amazon’s warehouses.
The group is called Amazon En Lucha, and it organized a walkout at Amazon’s fulfillment center outside of Spain’s capital, Madrid. The strike plans to last up until July 18th. That’s just enough time to disrupt sales during Prime Day and any orders that were placed during that big event.
Some protestors are wearing masks of CEO Jeff Bezos. This isn’t the first strike at this fulfillment center. Back in March, hundreds of employees walked out in a bid to negotiate working contracts.
For these employees, the increase in working hours, the elimination of bonuses, and the lack of protection against illnesses is what concerns them.
They’re working long and hard but feel as if they don’t have the security they feel entitled to.
As a company grows larger, so do its demands, which means an increase in employees who will be working harder and longer to fulfill a company’s goal.
Being one of the largest companies on the planets has its benefits but also its downfall. A kink in the chain is going to cause disruptions to the end goal. Hopefully Amazon can keep its employees happy so it can maintain its top position.
Until next time,
Monica Savaglia
Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.
