Amazon Business Model, Risk Factors, and Contingent Liabilities

In this week’s video blog post, I look at Amazons business model, top 5 risk factors, and contingent liabilities outlined in the company’s annual report.

In the recent months, Amazon has gained a lot of attention since it is a key online retailer during this ongoing pandemic. As value investors, it is important to review the company’s fundamentals before deciding to invest in any company. Hope you all find this 15 minute video blog interesting. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.

Amazon is divided into 3 business segments – North American, International, and Amazon Web Services (AWS). The North American and International segments consists of online sales and subscription revenue. The AWS segment consists of revenue from cloud storage, computing, database, etc.

The top 5 risk factors I discussed are:

  1. Amazon Faces Significant Inventory Risk
  2. We Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third Parties
  3. Government Regulation Is Evolving and Unfavorable Changes Could Harm Amazon’s Business
  4. Amazon Faces Additional Tax Liabilities and Collection Obligations
  5. Amazon’s Supplier Relationships Subject Them to a Number of Risks

Timestamp
0:00 Introduction / Business Overview
2:03 Top 5 Risk Factors
8:01 Contingent Liabilities
15:05 End

If you found my video below helpful and interesting, please do like, share, and subscribe to the YouTube channel

Audio / Podcast

References:

10K Annual Report: here

Morningstar Key Ratios Link: here.

Company overview: Amazon.com, Inc., is an American multinational technology company based in Seattle, Washington. Amazon focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is considered one of the Big Four technology companies, along with Google, Apple, and Facebook.

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Superior North LLC’s content is for educational purposes only. The calculators, videos, recommendations, and general investment ideas are not to be actioned with real money. Vyom Joshi is not a professional money manager or a financial advisor. Contact a professional and certified financial advisor before making any financial decisions. Please review the Disclaimer and Terms and Conditions.


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