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Amazon continues to power ahead

28 July 2003

Amazon has continued to surge ahead with sales growth backed by new initiatives, such as the controversial but highly successful addition of used books. It has also been active on the promotional front, with last Christmas's free delivery on spends over £39 in the UK proving so effective in growing sales that it has become a regular offer. has just announced its intention to bring the free delivery figure down to £25.

Harry Pottter has played its part in this sales growth. Amazon's worldwide sales of the book were 1.4 million. The international division sold at least 420,000 copies of Harry Potter and the Order of the Phoenix in the UK, enabling it for the first time to move into operating profit, which was £8.1m ($13m) for the three months to the end of June. Robin Terrell, MD said: 'We used it to reinforce our low price offer and to attract new customers. It drove a quarter of a million new customers to Amazon worldwide.' Growth in international sales of 'media products' - books, music CDs, DVDs and video games - was up 75%.

The latest initiative from Amazon is Look Inside the Book II, which will involve the online retailer acquiring digital rights so that their customers can browse online by searching and reading pages before buying. This is likely to create a storm in the publishing world, where a clear distinction is usually drawn between selling books (and the promotional efforts involved) and sub-leasing rights.

Globally, Amazon is making huge strides and its stock price has more than doubled in the last year. It has seen off the competition and now has a clear field.'s second quarter net sales are $1.1bn and its net loss has halved to $43m. But as pointed out: 'With Amazon's stock still trading at nearly 73 times projected 2003 pro forma earnings, the company still has little room for error going forward.'