Amazon.com 2012 Annual Report Download - page 13

claims if customers of these offerings experience service disruptions or failures or other quality issues. In
addition, profitability, if any, in our newer activities may be lower than in our older activities, and we may not be
successful enough in these newer activities to recoup our investments in them. If any of this were to occur, it
could damage our reputation, limit our growth and negatively affect our operating results.
We May Experience Significant Fluctuations in Our Operating Results and Growth Rate
We may not be able to accurately forecast our growth rate. We base our expense levels and investment plans
on sales estimates. A significant portion of our expenses and investments is fixed, and we may not be able to
adjust our spending quickly enough if our sales are less than expected.
Our revenue growth may not be sustainable, and our percentage growth rates may decrease. Our revenue
and operating profit growth depends on the continued growth of demand for the products and services offered by
us or our sellers, and our business is affected by general economic and business conditions worldwide. A
softening of demand, whether caused by changes in customer preferences or a weakening of the U.S. or global
economies, may result in decreased revenue or growth.
Our sales and operating results will also fluctuate for many other reasons, including due to risks described
elsewhere in this section and the following:
• our ability to retain and increase sales to existing customers, attract new customers, and satisfy our
customers’ demands;
• our ability to retain and expand our network of sellers;
• our ability to offer products on favorable terms, manage inventory, and fulfill orders;
• the introduction of competitive websites, products, services, price decreases, or improvements;
• changes in usage or adoption rates of the Internet, e-commerce, digital media devices and web services,
including outside the U.S.;
• timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure;
• the success of our geographic, service, and product line expansions;
• the outcomes of legal proceedings and claims;
• variations in the mix of products and services we sell;
• variations in our level of merchandise and vendor returns;
• the extent to which we offer free shipping, continue to reduce product prices worldwide, and provide
additional benefits to our customers;
• the extent to which we invest in technology and content, fulfillment and other expense categories;
• increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products
and commodities like paper and packing supplies;
• the extent to which our equity-method investees record significant operating and non-operating items;
• the extent to which operators of the networks between our customers and our websites successfully
charge fees to grant our customers unimpaired and unconstrained access to our online services;
• our ability to collect amounts owed to us when they become due;
• the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails,
denial of service attacks, data theft, computer intrusions, outages, and similar events; and
• terrorist attacks and armed hostilities.
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