tag:blogger.com,1999:blog-32202893.post428347342888616445..comments2023-10-18T08:32:17.510-07:00Comments on Kevin Hillstrom: MineThatData: LivingSocial / Amazon Social Commerce Promotion ProfitabilityUnknownnoreply@blogger.comBlogger8125tag:blogger.com,1999:blog-32202893.post-62857407463545907602011-11-28T18:07:15.074-08:002011-11-28T18:07:15.074-08:00@Amy: Well, same here I am not a number genius als...@Amy: Well, same here I am not a number genius also. You're not alone.<br /><br />@Kevin: I'd agree with most of the comments you've shared above in your post. Amazon is really true! No debt just amazon revenue!Dianne Perkinshttp://alpha.forcastix.com/Amazon-com-AMZN/overviewnoreply@blogger.comtag:blogger.com,1999:blog-32202893.post-6613904364322400892011-01-21T08:35:55.495-08:002011-01-21T08:35:55.495-08:00Jay --- that's the point of the p&l ... if...Jay --- that's the point of the p&l ... if you are a retailer, run the numbers above ... any of the readers could have taken the retailer portion of this p&l and observed how hopeless the situation is.<br /><br />And Kevin, yes, you doubt the incremental rate is 70%, somebody else says it is 90%, somebody else says it is 50%. Plug your favorite number in, and see what the simplistic model tells you!MineThatDatahttps://www.blogger.com/profile/14014200122021988374noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-30304339670723669972011-01-21T06:02:46.305-08:002011-01-21T06:02:46.305-08:00It sure takes a lot of 'maybes' and 'h...It sure takes a lot of 'maybes' and 'hopefullys' to get to a long-term profit. I can understand (somewhat) how a new, service-based business could get to value using this type of promo. But it seems exceptionally hard for a retailer to give it all away and get there. You're also assuming that Living Social received nothing but press from this (unless I'm doing the $13 mil wrong).Jay Allenhttp://www.teavana.comnoreply@blogger.comtag:blogger.com,1999:blog-32202893.post-68881125586036289252011-01-21T06:00:09.347-08:002011-01-21T06:00:09.347-08:00Another great post, Kevin. I love your point about...Another great post, Kevin. I love your point about "Actual Data > Popularity + Strongly Worded Opinions." Now that I've actually received this deal and seen how the redemption works, I doubt there will be 70% incremental sales. Basically, you just apply the gift card to your account and if will deduct from it on your next purchase or purchases. I will end up using it on my next purchase from Amazon (one that I would have done anyway). While this will no doubt spur some people to buy something extra now, my experience tells me that the number will be relatively low. Furthermore, and this is just a somewhat educated guess, the promotion was probably as popular as it was because it was Amazon and most people knew they would be buying something at Amazon at some point.<br /><br />I think the overall value here is really about getting Living Social some press and a lot of new enrollees. All of the sudden, they are on the same playing field as Groupon. Is that worth $13 million? Don't know. Maybe.<br /><br />Anyway...there's my two cents.Kevin Ertellhttp://www.retailshakennotstirred.comnoreply@blogger.comtag:blogger.com,1999:blog-32202893.post-33903445726473598702011-01-20T14:59:35.107-08:002011-01-20T14:59:35.107-08:00Anonymous --- glad I could provide enjoyment in yo...Anonymous --- glad I could provide enjoyment in your life!<br /><br />Will --- agree, you'll have some breakage that adds profit to the Amazon cash register.<br /><br />Amy --- you are correct, the strategy does impact valuation/funding, so it's always fun to see folks bump that top line up to aid in valuation, good point.MineThatDatahttps://www.blogger.com/profile/14014200122021988374noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-57135396875164886852011-01-20T14:25:34.888-08:002011-01-20T14:25:34.888-08:00Well, I am certainly not the numbers genius that y...Well, I am certainly not the numbers genius that you are but I do think there is another option to consider in this and that is doing the numbers not for a company's P&L but for the current/future valuation and/or funding. <br /><br />There's do doubt that many VC's have too much money and too few places to invest it in these days...Amy Africahttp://www.amyafrica.comnoreply@blogger.comtag:blogger.com,1999:blog-32202893.post-404355877041380802011-01-20T13:51:49.505-08:002011-01-20T13:51:49.505-08:00I wonder what the "breakage" rate (those...I wonder what the "breakage" rate (those who don't redeem, or redeem for less than $20 then let the remaining funds expire) is on this promo. Probably quite small, but still pure profit for Amazon.willhttp://www.plannedparenthood.orgnoreply@blogger.comtag:blogger.com,1999:blog-32202893.post-26343581187344963172011-01-20T12:08:37.694-08:002011-01-20T12:08:37.694-08:00Enjoyed the breakdown.Enjoyed the breakdown.Anonymousnoreply@blogger.com