Amazon.com 2001 Annual Report Download - page 17

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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 centers during
these peak periods, and we, along with our customer service outsourcers, may be unable to adequately staff
customer service centers.
We generally have payment terms with our vendors that extend beyond the amount of time necessary to
collect proceeds from our customers. As a result of holiday sales, at December 31 of each year our cash, cash
equivalents and marketable securities balance reaches its highest level (other than as a result of cash flows
provided by investing and financing activities). This operating cycle results in a corresponding increase in
accounts payable. Our accounts payable balance will decline during the first three months following year-end and
will result in a decline in the amount of cash, cash equivalents and marketable securities on hand.
We May Experience Significant Fluctuations in Our Operating Results and Rate of Growth
Due to our limited operating history, our evolving business model and the unpredictability of our industry,
we may not be able to accurately forecast our rate of growth. We base our current and future expense levels and
our investment plans on estimates of future net sales and rate of growth. 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 revenue and operating profit growth depends on the continued growth of online demand for the
products offered by us or our third party sellers, and our business is affected by general economic and business
conditions throughout the world. A softening of demand, whether caused by changes in consumer preferences or
a weakening of the U.S. or global economies, may result in decreased revenue or growth. Recent terrorist attacks
upon the U.S. have added economic and consumer uncertainty that could adversely affect our revenue or growth.
Security concerns could create delays in and increase the cost of product shipments to and from us, which may
decrease demand. Revenue growth may not be sustainable and our company-wide percentage growth rate may
decrease in the future.
Our net sales and operating results will also fluctuate for many other reasons, including:
‰our ability to retain and increase sales to existing customers, attract new customers and satisfy our
customers’ demands;
‰our ability to expand our network of third party sellers;
‰foreign currency exchange rate fluctuations;
‰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 and costs of upgrades and developments in our systems and infrastructure;
‰the effects of strategic alliances, acquisitions and other business combinations, and our ability to
successfully integrate them into our business;
‰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;
‰disruptions in service by shipping carriers; and
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