Amazon.com 2000 Annual Report Download - page 15

prevent us from efficiently fulfilling orders, which may reduce the volume of goods we sell and the
attractiveness of our products and services. In addition, we may be unable to adequately staff our fulfillment
and customer service centers during these peak periods.
Our inventory balance increases substantially in advance of the Christmas holiday. Payments for purchases
of much of this inventory does not occur until the first quarter of the following fiscal year. Because we are paid
for sales of product upon shipment, we anticipate an increase in available cash in the fourth quarter of our
fiscal year, followed by a decrease in the first quarter as we make payments for inventory purchased in the
previous fiscal year.
We May Experience Significant Fluctuations in Our Operating Results
Due to our limited operating history and the unpredictability of our industry, we may not be able to
accurately forecast our net sales. We base our current and future expense levels and our investment plans on
estimates of future net sales. Our expenses and investments are to a large extent fixed. We may not be able to
adjust our spending quickly if our net sales fall short of our expectations.
Our operating results will fluctuate for many reasons, including:
•changes in general economic conditions, including consumer spending,
•our ability to retain and increase sales to existing customers, attract new customers and satisfy our
customers’ demands,
•our ability to acquire merchandise, manage our inventory and fulfill orders,
•the introduction by our competitors of Web sites, products or services,
•changes in usage of the Internet and online services and consumer acceptance of the Internet and
e-commerce,
•timing of upgrades and developments in our systems and infrastructure,
•the effects of acquisitions and other business combinations, and our ability to successfully integrate
those acquisitions and business combinations,
•technical difficulties, system downtime or Internet brownouts,
•variations in the mix of products and services we sell,
•variations in our level of merchandise and vendor returns, and
•disruptions in service by shipping carriers.
Both seasonal fluctuations in Internet usage and traditional retail seasonality are likely to affect our
business. Internet usage generally slows during the summer months. Sales in almost all of our product groups,
particularly toys and electronics, usually increase significantly in the fourth calendar quarter of each year.
Our Past and Planned Future Growth Will Place a Significant Strain on our Management, Operational
and Financial Resources
We have rapidly and significantly expanded our operations and will expand further to address growth of
our product and service offerings and customer base. This growth will continue to place a significant strain on
our management, operational and financial resources. We also need to train and manage our employee base.
Our current and planned personnel, systems, procedures and controls may not be adequate to support and
effectively manage our future operations. We may not be able to hire, train, retain, motivate and manage
required personnel, which may limit our growth.
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