In a statement accompanying its fourth quarter and full year results for 2012, Amazon founder Jeff Bezos neatly summed up where he sees the future of book retailing heading--especially for his company. “We’re now seeing the transition we’ve been expecting,” said Bezos. “After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%.”
To fuel the sale of e-books, Amazon has sold lots of digital readers and tablets, but has is its custom released no hard numbers other than repeating that at year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch. The number of digital products Amazon offered at the end of 2012 stood at 23 million, up from 19 million a year ago.
The overall numbers for Amazon were huge as usual--fourth quarter sales rose 22% to $21.27 billion--just about in the middle of its forecast of between $22.25 million and $22.75 million--while net income decreased 45%, to $97 million; projections ranged from a loss of $490 million to earnings of $310 million. Unit sales rose at a faster rate than sales, up 32% helped by higher sales through third party sellers which expanded to 39% of units in the quarter. Sales of some higher priced items were softer than last year, Tom Szkutak, Amazon CFO, said, as were sales of some consumer electronic products. Amazon's devices did well, however, and Szkutak said Amazon ran out of stock of the Paperwhite.
For the full year, net sales increased 27% to $61.09 billion, and Amazon reported a net loss of $39 million compared with net income of $631 million in 2011. Sales in the North America media segment rose 15% in 2012, to $9.2 billion, while sales in the electronics and general merchanside (egm) North American segment increased 34%, to $23.3 billion. Internationally, media sales increased 9.5%, to $10.7 billion and egm revenue rose 35% to $15.4 billion. In 2012, Amazon opened Kindle stores in China, Canada, Brazil, and Japan.
During the year, Amazon added 20 fulfillment centers, part of its strategy to move product closer to its customers, a move that cut transportation costs. The company will add more capacity this year, but Amazon declined to discuss how committed it is to providing same day fulfillment. The number of Prime shipping members increased "dramatically" in the year, Szuktak said. Its total customer count rose to over 200 million.
