Watch Out For eBay Inc (NASDAQ:EBAY) & Amazon.com Inc (NASDAQ:AMZN) This Holiday Season
Ecommerce is definitely one trend that is gaining pace, not just in the U.S, but across the world as well but are companies like eBay Inc (NASDAQ:EBAY) and Amazon.com, Inc (NASDAQ:AMZN) cheering about the fact that a larger number of people are veering away from brick and mortar stores and towards online shopping?
The holiday season
Well, not really. The holiday season is right round the corner but there are no smiles in any of the online retailer’s corridors. On Wednesday, eBay Inc (NASDAQ:EBAY) announced out a very dismal outlook for the upcoming holiday season. The reasons that have been cited are factors like the damp economic environment and diminishing customer confidence in addition to the government shutdown have added woe upon woe on retailing businesses that have been struggling to maintain profitability and garner revenue.
Bob Swan, eBay Inc (NASDAQ:EBAY)’s Chief Financial Officer stated to investors that there was a 13% drop in ecommerce growth rates in the Q3 in comparison to the 16% that they stood at in the previous quarter and October has not brought in any positive signs so far. The company is projecting a profit of 79-81 cents /share for the holiday quarter while the analysts estimate is 83 cents.
First orders shipped
The Amazon of the ecommerce space, Amazon.com, Inc (NASDAQ:AMZN) has been trying to put up a brave face by gearing up for the holiday season. The company had opened 2 new warehouses in Northern California and in total, 700 full-time workers have been hired in expectation that the holiday season will bring in a flood of orders. The first customer orders just got shipped from these warehouses which are called fulfillment centers.
The company had opened up one such center in San Bernardino, a year ago but had refrained from operating in California as the company did want to have to collect the sales taxes on the purchases that Golden State customers has made. Meanwhile, starting next month, Wisconsin will commence collecting tax from residents who purchase goods via Amazon.com.