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Sangara Narayanan
Sangara Narayanan
Articles (543) 

Amazon Prime Day Drives Record-Breaking Growth

Prime Day 2017 was the biggest sales day in company's history

July 17, 2017 | About:

Amazon (NASDAQ:AMZNannounced last week that the company’s Prime Day 2017, an annual event when Amazon puts out deals that are reserved exclusively for Prime members, grew by more than 60% compared to last year. The company also said that more new members joined Prime on July 11 than on any single day in Amazon’s history.

The company did this without divulging the exact numbers while adding that the number of Prime members who made a purchase this year shot up by 50%.

Amazon wasn’t really forthcoming with what exactly happened during the Prime Day event, except for throwing vague percentages at us. But one thing we know for sure is that the third annual Prime Day was much better than the previous two, and even surpassed 2016 Black Friday and Cyber Monday results. Interestingly, the deals on Black Friday and Cyber Monday are not locked for Prime members, but open to all.

During the recent holiday season, Amazon walked away with 36.9% of e-commerce sales in the United States, a bit more than one third of all e-commerce sales. If Amazon did more sales during this year’s Prime Day event compared to how much they sold on Cyber Monday and Black Friday, it clearly points to the amount of strength Prime members are bringing to Amazon’s table.

To put that in plain terms, Amazon’s Prime members bought more during the Prime Day event than what the whole country bought from Amazon on Cyber Monday and Black Friday last year.

Last year, Prime Day also was Amazon's biggest sales day ever at the time, setting the bar high this go-round. In 2016, Prime Day sales rose more than 60% from the prior year, and in the U.S. orders were up more than 50%, Amazon said.  CNBC

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Amazon’s Prime Day sales have now grown by 60% for two years in a row. For every dollar it made in 2015, Amazon make $2.50 in 2017. The number of Amazon Prime members grew from 25 million in December 2013 to 63 million by June 2016, and it will have reached much higher levels by now.

The growth of Prime memberships could be one factor that has propelled such growth. But sales, which went up by a factor of 2.5 in two years, also show that Prime customers are ordering more than they did two years ago. This shows how dominant Amazon is slowly becoming in the ecommerce space, due to the strength of its Prime membership program.

And this is only one of its growth drivers, albeit its most important one in the retail division.

Disclosure: I have no positions in the stock mentioned above and no intention to initiate a position in the next 72 hours.

About the author:

Sangara Narayanan
Sangara Narayanan holds an MBA from Kent State University, Ohio, and has worked on the floor as a trader in New York. You know where. He is passionate about capital markets and specializes in business analysis, stock valuations and making chicken curry

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