Amazon Q1 Results Preview (from a seller's perspective)
After the market tomorrow, Thursday April 24th, 2014, Amazon will report their Q4 2013 results. Due to their battle with shareholder activist, Carl Icahn, eBay is releasing their results AFTER Amazon this Q (eBay is next week Tuesday April 29th) so we'll be reporting on the Amazon numbers first this time around.
From our SSS data, Amazon averaged 21.1% y/y growth. According to comScore's e-commerce brief, online desktop e-commerce (no travel, no mobile) increased 12% in Q1 2014 - a bit faster than Q4 2013 and slower than all of 2013. Given that historically mobile is ~30% of desktop, we will go with 15% for the US e-commerce growth rate (with mobile, no travel).
As we kick off 2014, it will be interesting to see how Amazon and eBay's growth rate overall and for each of it's segments compares to this 15% 'base line' growth rate.
Key metrics we are watching
- Active users - Every other metric is 'backwards facing', so we like active users because it is forward looking because it tells us how many shoppers are actively buying on Amazon going forward. Last year (Q1 2013) Amazon had 209m active users. This metric has been growing at a 19% clip so if we project that on the 209m active users, we get 248m active users.
- EGM y/y growth rate - This blog is for Amazon sellers and the bulk of Amazon sellers are in the EGM category (Electronics and General Merchandise). Last Q (Q4 13) , EGM grew at 24% with the US at 25% and non-US at 21%. A year ago (Q1 13) EGM grew 30% - 28% domestic and 32% non-domestic.
- % units from 3P - For the last year this metric has been ‘stuck’ at 40% after previously moving a point or so every Q. For one Q, (Q2 2013) Amazon did mention that the metric was under pressure because they changed the way many digital books are sold (moving them from 3P to 1P) and that if they excluded that it would be 43%. Unfortunately they haven’t provided details on that again that I’ve seen, so we have been patiently waiting for this headwind to either dissipate or ‘we lap it’.
- Sold item growth - Wall St. loves this metric because it feels like it should be a proxy for how fast Amazon is growing when you take out category mix, ASP differences, media->EGM and what-not. The problem is Amazon’s digital businesses (books, streaming videos, and apps today - who knows in the future) confuse this. Have you ever seen how many free apps and books there are? They don’t count here. If a Kindle book is $.99 it IS in here. Personally I don’t track this one as religiously and wish there was an EGM item sold metric instead. The reason it makes the list though is because it is one metric that both eBay and Amazon report.
This dashboard shows all of the metrics we'll be watching closely to see how Amazon performed:
We will have the highlights from the report out Friday - stay tuned!
This blog post was written by Scot Wingo, CEO, ChannelAdvisor.