ChannelAdvisor Scot Wingo By Scot Wingo

Amazon’s Q2 2016 Results Preview – What Sellers Should Look For

After the market closes on Thursday, July 28th, 2016, Amazon will report their Q2 results from 2016.  comScore continues to predict that e-commerce is growing by 15%, so that is the baseline we use to measure the different components of Amazon’s business.  Interestingly the Department of Commerce (DoC) came out with preliminary Q2 data for non-store retailers that were up 13.2%.  When you add in the non-store sales from store retailers (omnichannel), that suggests an acceleration in e-commerce from the 15% comScore baseline to 20%.  It will be interesting to see if this DoC acceleration is reflected in Amazon’s results, which you would expect if there was a rising tide.

The Amazon Q2 Results Tracker for Sellers

Here is a dashboard for the key metrics that we’ll be listening for in the call, along with where Wall St. is predicting and also where Amazon has guided to:

amzn_q2_results_tracker_preview

What We Watch for First – Growth

Amazon is the largest online retailer and last year grew at a rate of about 2X e-commerce.  How long can they keep this up? Will the investments they continue to make in logistics/fulfillment, international and category expansion, and much more cause an acceleration?  The ChannelAdvisor SSS data came in at 12.3% for Q2 for Amazon.

Amazon gives us the data to be able to look at ~10 different areas of growth and we’ll be watching each of these (EGM especially) closely to watch for acceleration/deceleration.

Other Items We’re Watching

In addition to the key performance indicators in the results tracker, we’ll also be listening for:

  • Logistics, Fulfillment and Supply Chain – Amazon has indicated that the FCs are full and implemented surge pricing for Holiday 16.  In the last 3-4 months they have announced 13+ FCs (see list below) which is a LOT of capacity, but will it be enough to help this Holiday?  Also, Amazon has been investing a lot in logistics and supply chain and Wall St. is watching this closely to see if Amazon mentions anything new in this area.
  • Amazon Prime Day– All data released so far suggests that Amazon had a very strong Prime Day.  While Prime Day occurred  in Q3, last year during the Q2 call, Amazon added some color in the Q+A with Wall St, so there maybe something new there.
  • Seller Fulfilled Prime (SFP) (aka Merchant Fulfilled Prime Eligible) – One of the ways Amazon is relieving the pressure on FBA is to allow more and more sellers to ship Prime-eligible products themselves.  Amazon hasn’t said much about the momentum of this program.

Amazon’s latest Fulfillment Center (FC) announcements

Amazon slowed their FC buildout announcement pace in Q4 15 and Q1 16 and then since March has announced a whopping 17 new FCs in the US alone:

 

  1. March 24 – Edgerton, KS, 800k square-feet
  2. March 30 – San Bernadino, CA, 1.1m square-feet
  3. April 20 – Haslet, TX, 1m square-feet
  4. April 27 – Florence, NJ, 600k square-feet
  5. April 27 – Caarteret, NJ, 800k square-feet
  6. May 25 – Eastville, CA, 1M square-feet
  7. May 25 – Tracy, CA, 1M square-feet
  8. June 2 – Joliet, IL, 700K square-feet
  9. June 2 – Edwardsville, IL, 700K square-feet
  10. June 2 – Edwardsville, IL, 700K square-feet (they are building two)
  11. June 22 – Braselton, GA, 600K square-feet
  12. July 11 – Kansas City, KS, 850K square-feet
  13. July 15 – Sacramento, CA, 850k square-feet
  14. July 20 – RTP, NC, 324,838K square-feet
  15. July 22 – Houston, TX, 855K square-feet
  16. July 26 – Romeoville, IL, 750k square-feet
  17. July 27 – Jacksonville, FL, 800K square-feet

Conclusion

We will do a deep dive after the results are out this Friday.  Stay Tuned!

 

This blog post was written by Scot Wingo, Co-founder and Executive Chairman, ChannelAdvisor

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