Here's Why Amazon Is A Great Investiment

Amazon has been an incredibly interesting stock to follow as of late. For more than a year now, the stock has been riding on highs. However, this wasn't necessarily expected to happen by many experts. In fact, in late 2014, the stock as tanking as profitability simply wasn't there. However, things have changed in a big way, and these days, AMZN is one of he strongest stocks on the market. Today, we'll talk about why the stock is such a strong investment.

First and foremost, Amazon Prime plays a massive role in the reason I'm so bullish on the stock. In the beginning of prime, and for the first couple of years, it was a bit concerning. AMZN offered a service for only $99 per year. This would cover 2 day shipping on all orders and allow streaming video, and many more perks. The reality is that the numbers simply didn't seem to add up.

However, last year, a few analyst firms decided to look into prime to figure out the true value of the service. What they found was incredible. While Prime likely did lose money on shipping costs and other costs associated with the service when it came to some members, when it comes to most members, the service is actually very profitable.

You see, most people on Amazon Prime aren't using their streaming services. So, the majority of the service is focused on free 2 day shipping. This factor drives consumers in and gets them to shop! In fact, it was recently uncovered that the majority of people using the Prime service offered by AMZN are spending at least $800 per year at the company's website. So, Prime isn't exactly a losing endeavor, in fact it's a winning one!

Another reason that I take such a bullish stance when it comes to AMZN is the fact that the company has one of the leading cloud services in the world. That service is called Amazon Web Services. This cloud service grew to be a $5 billion company before investors heard the first financial reports associated with it. Now, it is looked at in high regard among the tech community. In fact, even SalesForce loves AWS. The company recently signed a massive deal to use the service for its own cloud computing needs.

In late 2014, investors were concerned that Amazon was spending too much money. However, the company was using this money to build fulfillment centers everywhere they could, and that plan is paying off. You see, consumers that shop online are interested in fast shipping, and AMZN knew it. As a result of building these fulfillment centers, AMZN would be able to fulfill orders faster than any other online retail company.

Not only has the ability to send shipments quickly helped the company in a big way, it is also opening the door to expansion opportunities. You see, Amazon is starting Amazon Fresh, an online grocery store if you will. This couldn't happen if shipments didn't happen quickly.

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The Bottom Line

While it seemed like Jeff Bezos was driving Amazon into the dirt in 2014, his plans have worked out. This genius CEO has been able to turn things around in a big way, making AMZN a one stop shop for much more than birthday presents for children. All in all, the company has done incredibly well building several solid products, a solid infrastructure, and ultimately a business that will grow. As a result, I'm expecting to see gains from the stock moving forward.

Original post

Written By: Joshua Rodriguez