The Aftermath of Amazon’s Pandemic Overexpansion

As e-commerce took off during the pandemic, online shopping became a new way of life. Everything from groceries to pajamas could be bought online and delivered right to your doorstep. To meet this seemingly permanent shift in demand, Jeff Bezos led Amazon on an ambitious plan to expand its logistics networks and warehouse capacity. They also hired a lot more workers during that period.

With COVID-19 easing in 2022, consumers have returned to brick-and-mortar stores. As online sales slowed, Amazon’s excess warehouse capacity added as much as $10 billion in extra costs during the first half of 2022.

To turn Amazon around, new CEO Andy Jassy has been undoing most of Bezos’ pandemic expansion. This includes subleasing excess warehouse space and closing down several physical stores.

In the year to date, Amazon’s share price has tumbled almost 33%. Competition from Walmart in the e-commerce segment is also heating up.

On the bright side, Amazon’s other segments like its cloud computing unit Amazon Web Services are still profitable and growing at a healthy pace.

Listen to the full story on our podcast, available on Spotify, Apple Podcasts, and Google Podcasts. Alternatively, click on the player to listen from your browser.

How to invest in Amazon stock

Want to invest in Amazon? You can buy Amazon shares through a brokerage platform like Syfe Trade! You’ll enjoy free trades every month and super low commissions on trades thereafter.

What’s more, Syfe Trade’s fractional investing feature means you can buy Amazon stock with as little as US$1. This makes it easy for you to diversify your stock holdings or dollar cost average.

Sign up with Syfe Trade today to get a welcome gift of S$60. Remember to enter the code “TRADENEW” when creating your account. Fund your account with a minimum of S$2,000 and make your first trade in order to claim your welcome offer.

Previous articleCrypto Winter, Bailouts, A Crypto Saviour Emerges
Next articleWarren Buffett’s Dream Business