Source: 2004 Letter to shareholders
Published: Q1 2005

Capital Efficiency of Amazon Retail

Circulated: October 2, 2019

“We have a cash generative operating cycle because we turn our inventory quickly, collecting payments from our customers before payments are due to suppliers. Our high inventory turnover means we maintain relatively low levels of investment in inventory — $480 million at year end on a sales base of nearly $7 billion.

The capital efficiency of our business model is illustrated by our modest investments in fixed assets, which were $246 million at year end or 4% of 2004 sales.”

- Jeff Bezos