Amazon (AMZN, $1,723.42) keen on adopting a business model like eBay’s (EBAY, $36.64) than Walmart’s (WMT, $102.20)
When consumers buy products from Amazon, they are actually buying from third party sellers and not exactly from Amazon. But that’s rather the good news. Third-party sellers on Amazon account for 58% of gross merchandise volume bought on Amazon’s website.
Amazon is willing to sell more items from third-party sellers as it is more profitable and involve less risk for Amazon. In fact, Amazon has plans to stop making bulk wholesale orders. Instead, it wants to encourage small vendors to use their third-party selling services.
Therefore, Amazon wants to become more like eBay and less like Walmart.
As an online marketplace, eBay is merely responsible for bringing contact sellers with the buyers. It takes a commission on every sale, charges sellers for additional perks like advertising their product listings and doesn't have to store or ship any inventory.
This is indeed a very profitable business model as eBay posted a 23% operating margin in Q1 in comparison to Amazon’s 7.4% and Walmart’s only 4%.
But Amazon has more scale than eBay. eBay's gross merchandise volume for 2018 was about $94.6 billion while Amazon's third-party merchants sold $160 billion. And that number is growing much more quickly than at eBay.
But Amazon has some other unique advantages that keep it at the cutting edge of online marketing. Case-in-point: Amazon’s fulfillment service offers storage and shipping services to sellers and its Prime shipping service has been upgraded from two-day to one-day shipping service.
This fulfilment service is instrumental in transitioning products from small vendors directly to customers. It even fulfils orders from other marketplaces. And since Amazon accounts for the major share in the online marketing scene, vendors usually don’t leave its platform.
Moving vendors to third-party seller services also help in improving the margins for Amazon as it can demand a greater cut in commissions and also does not need to manage vendor relationships or its inventory.
Amazon is hence becoming more like an eBay marketplace than a retailer like Walmart.
AMZN in upward trend: price rose above 50-day moving average on May 08, 2025
AMZN moved above its 50-day moving average on May 08, 2025 date and that indicates a change from a downward trend to an upward trend. In of 46 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The 10-day moving average for AMZN crossed bullishly above the 50-day moving average on May 12, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AMZN advanced for three days, in of 326 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 291 cases where AMZN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for AMZN moved out of overbought territory on May 15, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 45 similar instances where the indicator moved out of overbought territory. In of the 45 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 69 cases where AMZN's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on May 27, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on AMZN as a result. In of 79 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for AMZN turned negative on May 30, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMZN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
AMZN broke above its upper Bollinger Band on May 12, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AMZN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.117) is normal, around the industry mean (4.547). P/E Ratio (33.389) is within average values for comparable stocks, (49.262). AMZN's Projected Growth (PEG Ratio) (2.269) is slightly higher than the industry average of (1.378). Dividend Yield (0.000) settles around the average of (0.106) among similar stocks. P/S Ratio (3.390) is also within normal values, averaging (6.548).
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a provider of on-line retail shopping services
Industry InternetRetail
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