ParisLemon

The weirdest thing about Amazon getting into high fashion is this, as reported by Stephanie Clifford:

Amazon’s decision to go after high fashion is about plain economics. Because Amazon’s costs are about the same whether it is shipping a $10 book or a $1,000 skirt, “gross profit dollars per unit will be much higher on a fashion item,” Mr. Bezos said, and it already makes money on fashion.

That’s the opposite of Amazon’s model for everything else. All we hear about is how Amazon doesn’t care about profit margins — all they care about is revenue and getting to a Walmart-like scale where profit margins actually don’t matter. But this is Jeff Bezos directly contradicting that line of thinking. He’s touting the margin of this business.

Maybe Amazon is tired and/or a bit worried after watching their profit plunge quarter to quarter, even as revenues rise. That’s what trying to break into the hardware business will do. Maybe this is a way to offset those losses.

Or maybe this is part of Amazon’s plan to sell everything. It does seem likely that there’s no way they could sell designer fashion the way they sell other things (at a deep discount), no designer/brand would go for that. So this is the only way to break into the market.

But again, the article directly states that Amazon’s decision here is about “plain economics” and the Bezos’ direct quote also suggests that. 

So much for the Walmart plan. I guess Amazon will now try to be both a high margin and low margin business? Next up: a core focus on razor blades, ink cartridges, and mixed drinks.