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Amazon share price 1500 Their market cap is more than 700 bill Earning per share is...

Amazon share price 1500
Their market cap is more than 700 bill
Earning per share is good
But, why their Net profit margin is low?
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Answer #1

One of the main reasons for their low-profit margins is low pricing strategy for the products offered. Secondly, Amazon owns the majority of inventory sold by it which involves huge holding cost and carrying cost. Another very important factor is the increased advertising expenditure for its web services business to compete with other giant entities. They are facing fierce competition in retail also. As Mr. Jeff Bezos has also said once that low-profit margins are in one way good for the organization since then the market is not very attractive for others and keeps the competition in check.

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