Tomahawk, WI 8/12/2013 (Basicsmedia) – Amazon.Com Inc (Nasdaq:AMZN) has to start thinking of its future growth. It’s even absurd to think that such a company may not have thought about something as sensitive and crucial as its future. I know they have done so because the products they are coming up with appear to lend credence to this fact. The company has been reporting massive amounts as its quarterly revenues to the tune of around $16 billion, and they have put up measures in place to ensure that this revenue is not messed up in any way. In Q1 2013, the revenue collection went down by around 22%.

What is Driving Amazon.Com Revenue Growth?

A number of analysts have tried to examine the factors which could be responsible for the impressive performance by Amazon in the area of revenue growth. However, regardless of the analyst you talk to, you will realize that they never fail to mention one common factor; growth of the e-commerce industry. Amazon owes a large part of its growth in revenue, as well as survival on how e-commerce will fare on from this point onwards. It seems that for as long as the e-commerce industry will be reporting wonderful results, Amazon will report the same.

The other factor which has led to the impressive performance of Amazon has to do with the management making decisions which are spot on. An example is where the management has chosen to focus on running the operations of this massive company using the absolute cash flow. While other businesses try to pay too much attention on percentage margins, Amazon has chosen to ensure that it operates on absolute cash flow. This means that there is always more than adequate cash to take care of its operations, and this is good for its health as a business.

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Image shows Amazon.Com’s market share in the U.S.

Image is from www.seekingalpha.com

One advantage which Amazon has been enjoying over its competitors as a result of its decision to operate on absolute cash flow is that it is able to provide its customers with deep discounts. What this dose is that it convinces the customers to continue reporting back to Amazon whenever they need products and services which the massive company provides, while abandoning its competitors. This inevitably promotes the growth of Amazon as a company, and boosts its revenues thus will lead to an increase in profits and return on investments for its investors.

What Does The Future Hold for Amazon?

While it is impossible to tell what the future will look like with utmost certainty, what we need to understand is that the company has a great future. If you own investments or shares or stock with Amazon, there is no reason for you to get worried. The company has shown countless times that it is willing to reinvest its revenues back into the business especially where new and innovative products as well as services are involved. I believe that online markets will emerge as the preferred choice of many people, rather than physical stores, thus boosting Amazon’s growth.

Currently, online channels constitute only 8% of all retail sales in the U.S alone. This is expected to grow, and has a lot of potential. As it grows, Amazon should lead from the front since it is a company which has pioneered many services which are provided through online stores or e-commerce.

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