THE BLOG
04/28/2014 03:26 pm ET Updated Jun 27, 2014

Prophetic Profits

2014-04-28-RambleAmazon.jpg

"Amazon's Shrinking Profit Sets Off a Seismic Shock to Its Shares" - New York Times

"Anemic Amazon: Wall Street Tires Of Jeff Bezos' Aversion To Profit" - Forbes

Bing/Google -- no lack of opinion on this subject -- and it's all digibabbe...

At a recent conference I attended, a noted Digital Consultant listed Amazon's leading edge: first to market digital innovations like Prime Shipping. When I pointed out that old-fashioned catalogers had been using that tactic since Sears in the 1800s and that it wasn't profitable, he tried to belittle me -- what did I know, Amazon was turning a big profit and it was an innovation -- pure unadulterated digibabbe...

By the way, Amazon private delivery and drone delivery and same day will only drive them deeper in the hole (unless they charge full freight plus and that will cost more than the items in most cases) and yet that was their immediate response after the earnings announcement... beyond raising the Prime Charge.

Look, Amazon is a great company. I love them -- but when will we start treating them seriously? When will we start taking digital retail seriously and drop the digibabble that is hampering real business development and, frankly, only helping the analysts and institutional investors who buy into it for their own gains and have no real interest in the consumer -- far from it, in fact.

Amazon should be priced no higher than Walmart or Best Buy. I have written about this before -- they are all struggling with the same issues, hitting the same walls but from different sides -- and folks think about who knows more about logistics.

Many years ago, when Amazon first started selling, Sy Syms, the legendary creator of profitable discount business told me that he didn't understand the model -- you cannot make up profit in volume sales for what you sell below margin. It's simple math -- you would think -- yet we were convinced that huge numbers of buyers and clicks and traffic and such would make up for it. This was digital... don't you get it????

Think back -- if Bezos had been more judicious in his discounts, not everything needed its price slashed -- hard-to-find books, for example, could have been sold at a premium -- and had they charged full on pricing for shipping or at least adjusted margins so "free shipping" was actually covered, his stock price might have been lower ("You mean Amazon is really a retail business?") but his profit would have been higher and who knows...

Here is my view -- time for WEB 4.0, REALITY DIGITAL -- in fact, I think we are on our way. Warby Parker and others who have no shame in understanding that consumers behave in many different ways. Lots of retailers who feel no need to give away their online sales, they want profits as they don't have the huge reserves of the early-in first round digital companies with stupidly high valuations and mountains of cash and personal wealth. And maybe most importantly people like us who are living in a world of digital exponential -- that is, enjoying the benefits of digital in the real world without the need to listen to digibabble experts tell us that all we enjoy is dead or dying.

So stop obsessing about screens, don't worry if you like TV... however you may view it, don't feel bad if you are tired of cat and dog pictures and lists. Enjoy movies and live events and buy as much as you can from Amazon before they raise their prices.

So to the digibabble crowd who have now turned on their favorite, here is my view of your analytic abilities. Listen:

"If you keep saying things are going to be bad, you have a good chance of being a prophet." Isaac Bashevis Singer

As for Amazon, I hope you turn to the real profits... and maybe in the world of WEB 4.0. Reality Digital, it's time to re-imagine and stretch in new ways.

"This land may be profitable to those that will adventure it." Henry Hudson

Or as my good friend MGJ said -- say it simply and to the point.

Prophets and Profits... something to learn from each...

What do you think?