Valuetainment - April 22, 2020


Episode 458： 5 Trillion War - Amazon VS Walmart - Valuetainment Podcast


Episode Stats

Length

15 minutes

Words per Minute

174.70386

Word Count

2,699

Sentence Count

303

Misogynist Sentences

5


Summary


Transcript

00:00:00.000 I want to tell you about a heavyweight matchup that's taking place right now.
00:00:24.880 Now one company on this hand has 650,000 employees going up against another company that has
00:00:31.160 2.2 million employees.
00:00:32.880 This company does $280 billion in revenues 2019.
00:00:37.640 This one does $514 billion in revenues.
00:00:41.520 One is Goliath trying to be David.
00:00:44.260 One was David is slowly becoming Goliath.
00:00:47.180 When these two collapse, who wins?
00:00:49.580 We're going to talk about that today.
00:00:51.200 So some data here at first to measure these two companies.
00:00:55.020 You got Amazon, you got Walmart, right?
00:00:57.400 Amazon has 650,000 employees worldwide.
00:01:00.780 Walmart has 2.2 million employees worldwide.
00:01:02.840 That's more than three times.
00:01:04.840 Amazon has 75 fulfillment centers in US.
00:01:07.640 Walmart has 42.
00:01:09.440 Amazon's revenue last year was 281.
00:01:11.640 Walmart did $514 billion in revenues last year.
00:01:16.760 Digital stores, Amazon has shy of 600 including Whole Foods, which is about 500 of those 600.
00:01:23.440 Walmart has 11,300 stores worldwide, 5,900 in US, another 4,700 outside of US.
00:01:31.900 E-commerce business, Amazon's added their $280 billion of revenue, 141, more than 50%, came
00:01:39.620 just from online e-commerce.
00:01:41.540 But for Walmart, it's only 22.4 billion.
00:01:44.820 The number to keep in mind for Walmart on the online e-commerce business that's coming
00:01:49.140 in is the following.
00:01:50.540 They did 22.4 billion last year in 2019, but they did 11.5 billion the year before.
00:01:56.540 That means they're doubling.
00:01:57.660 They're playing offense to get that number going up.
00:02:00.580 Amazon's profits in 2019 was 11.6 billion.
00:02:03.740 Walmart's was 6.67 billion.
00:02:05.900 So let me get this straight.
00:02:07.920 Amazon's doing 281 billion a year, but they're profiting 11.6.
00:02:12.540 Walmart did 514 billion, but they're profiting half, twice the amount of revenue, half the
00:02:19.020 amount of net profits.
00:02:20.020 We'll get to that here in a minute.
00:02:21.660 Total products sold.
00:02:22.660 Amazon can sell 353 million different products.
00:02:29.040 Walmart says 35 million different products.
00:02:31.900 And in their physical stores, it's only 120,000 different products in stores.
00:02:36.280 It's very important to keep this number in mind, 120,000 products within the store, 35
00:02:41.540 million online.
00:02:43.540 Total countries sold in, Amazon's in 200, Walmart's in only 28.
00:02:48.140 Alexa ranking, Amazon, 14th website ranking Walmart 135, which is not good.
00:02:54.220 So here's the kicker.
00:02:55.500 When you're looking at these two guys, these competitors, this is what's taking place.
00:03:00.560 Amazon is trying to be Walmart.
00:03:03.340 Walmart is trying to be Amazon.
00:03:05.780 Amazon is looking at Walmart saying, wait a minute.
00:03:07.680 We never thought they were going to be a competitor, but they have 11,000 physical stores.
00:03:13.260 We don't have that many.
00:03:14.780 So if Walmart wanted to do immediate same day shipping and delivery to you, they can do
00:03:20.140 it.
00:03:21.140 I can't do it.
00:03:22.140 At Walmart, 90% of Americans live within 10 mile radius of Walmart.
00:03:27.840 That's dangerous.
00:03:28.840 140 million Americans shop at Walmart every single week.
00:03:34.400 That scares Amazon a little bit, right?
00:03:36.340 But on the other side, Walmart is sitting there saying, listen, I understand we're much bigger,
00:03:40.160 but if we don't get our act together, these guys are going to pass us up in no time.
00:03:44.460 We better learn what they're doing.
00:03:46.000 So it's almost like a certain level of envious and saying, man, I wish I had that.
00:03:50.380 I wish I had that.
00:03:51.380 That's why the whole David versus Goliath thing is taking place, which David is becoming
00:03:54.440 Goliath.
00:03:55.440 Goliath is becoming David, but we'll see what will happen here.
00:03:56.940 Now look at the revenues.
00:03:57.940 Look at the revenues here.
00:03:58.940 What happens between the two of them?
00:04:00.940 Amazon revenue, Walmart revenue.
00:04:02.140 We're going to go back to 2014.
00:04:03.700 In 2014, Amazon's revenue was only $89 billion.
00:04:07.940 And watch this.
00:04:09.000 They lost net profits, $241 million.
00:04:12.220 This is when the calls on Amazon, investor calls, everybody used to say, Jeff, when are
00:04:17.380 we going to start seeing profits?
00:04:19.020 When are we going to start seeing profits?
00:04:20.280 He would say, just trust me.
00:04:22.120 Just trust me.
00:04:23.380 Long term.
00:04:24.520 Long term.
00:04:25.520 Long term.
00:04:26.520 Next year, he gets $107 billion, $596 million of profits.
00:04:31.780 Next year, $135 billion, $2.4 billion profits.
00:04:34.120 $177 billion, $3 billion profits.
00:04:36.120 $132 billion, $10.1 billion in profits.
00:04:38.860 More than three times the year prior.
00:04:41.260 Then he goes to $280.5 billion, $11.6 billion in profits.
00:04:45.680 So now $11.6 billion in profits is nearly twice as much as Walmart.
00:04:49.380 Now look at Walmart.
00:04:50.380 2014, Walmart's already doing $476 billion.
00:04:53.220 It's not that big of a difference, but their profits are $16 billion per year.
00:04:57.380 Next year, they go to $485 billion.
00:04:58.380 A little growth.
00:04:59.380 Still $16 billion.
00:05:00.380 Next year, they go to $495 billion.
00:05:02.680 Profits goes lower, $14.6 billion.
00:05:04.520 Next year, they go to $485 billion.
00:05:06.620 Profits goes lower, $13.6 billion.
00:05:08.560 Next year, they go $500 billion.
00:05:10.780 Profits go lower, $9.8 billion.
00:05:12.660 And the last year, 2019, they go to $514 billion.
00:05:16.140 But profits goes lower to $6.6 billion.
00:05:18.760 Revenue's going like this.
00:05:19.760 Profits going like this.
00:05:20.880 What is happening?
00:05:21.880 Here's what's taking place.
00:05:23.360 They are taking a play out of their playbook.
00:05:26.540 They are saying, listen, just be patient.
00:05:29.840 They're going to get there because they're taking the money and they're investing into
00:05:34.820 online e-commerce to try to compete with these other guys.
00:05:37.860 And it's not just online e-commerce when you see what's taking place.
00:05:40.080 Now watch this.
00:05:41.080 Let's go to Amazon or Amazon's game.
00:05:42.980 This is Amazon's revenues of where the revenue comes from.
00:05:45.940 Remember how we said $281 billion and I said $141 billion of that is e-commerce?
00:05:51.060 That's the number one revenue.
00:05:52.440 More than 50%.
00:05:53.580 But the one part that we didn't include in this $141 billion is the fact that third-party
00:05:58.440 sellers for Amazon sell another $53 billion on Amazon.
00:06:03.280 Which if you include those two together, it's about $194 billion per year added to $281.
00:06:08.540 So keep that part of mind.
00:06:09.440 We simply separated it to say that's Amazon's online stores, right?
00:06:14.040 So $53 billion there.
00:06:15.380 Then you're going to AWS, which is Amazon Web Services, which we'll get into.
00:06:20.040 That one in Q4 of 2019, I think it did $9.6 billion and it grew by 35%, which is insane
00:06:25.760 when you hear those numbers.
00:06:27.180 We'll get into what that is.
00:06:28.180 I'm a customer of AWS on two different companies.
00:06:30.960 Then you have the subscription, which is the prime, $19 billion per year.
00:06:34.440 $19 billion is just prime subscription.
00:06:37.260 Then you have their physical store, $17.19 billion.
00:06:39.760 A big part of it is Whole Foods.
00:06:41.420 And last but not least is other $14.09 billion, whatever other kind of incomes that they have
00:06:45.700 coming in.
00:06:46.700 Now let's go back to AWS.
00:06:47.700 Watch this.
00:06:48.700 AWS.
00:06:49.700 Companies that use Amazon Web Services.
00:06:53.220 Watch this.
00:06:54.220 Airbnb relies on AWS.
00:06:57.820 Netflix is hosted on AWS.
00:07:00.660 Shopify, AWS.
00:07:02.660 NASA, you ever heard of NASA?
00:07:04.660 It uses AWS.
00:07:06.300 Adobe, GE, monstrosity, AWS.
00:07:10.560 British Petroleum, Amazon Web Services.
00:07:14.480 Department of State, Amazon Web Services.
00:07:17.700 City of Justice, Amazon Web Services.
00:07:20.620 DBS, which is, I believe it's the Department Bank of Singapore, I believe.
00:07:25.220 It's the Bank of Singapore, uses AWS.
00:07:27.820 I'm just giving you some of the customers.
00:07:30.260 These are just ... I can give you a hundred other names that you would most likely recognize.
00:07:35.220 That's what Amazon's doing.
00:07:36.220 What Amazon's doing with this, this is allowing them to make money and lose in other areas.
00:07:42.900 It's a cash cow.
00:07:44.300 This is something where a lot of people can do that has an advantage for them, where they
00:07:47.400 have money coming in from certain places and they can lose money in other places.
00:07:51.080 They don't care because they have money coming in.
00:07:52.720 It's an advantage that they have, very, very big advantage that they have because of AWS.
00:07:56.480 So now, these are the companies that ... some of the places that revenue's coming from.
00:08:00.760 Now watch this.
00:08:01.760 What companies that Amazon actually own?
00:08:03.560 Look at this.
00:08:04.760 Amazon owns Whole Foods.
00:08:05.760 Why they buy Whole Foods?
00:08:06.760 You'll find out why here in a minute why they buy Whole Foods.
00:08:09.760 IMDB.
00:08:10.760 Why IMDB?
00:08:11.760 Again, IMDB has to do with Prime.
00:08:14.340 They control IMDB.
00:08:15.480 They control Prime, right?
00:08:18.120 When I say Prime, I'm talking about their ... what do you call it?
00:08:20.400 Like the Netflix version of Prime that they have.
00:08:22.880 Zappos.
00:08:23.880 Amazon owns shoes.
00:08:25.000 By the way, Walmart owns shoes.com.
00:08:27.320 Goodreads.
00:08:28.320 Audible.
00:08:29.320 Twitch.
00:08:30.320 Why Twitch?
00:08:31.320 Future Video Gaming.
00:08:32.320 Think about the way these guys are thinking, right?
00:08:34.320 Ring, you ever seen the Ring, the camera ring?
00:08:37.320 Alexa.
00:08:38.320 They own Alexa, the sound.
00:08:39.960 You know Alexa, hey Alexa, can you call this person, hey Alexa, when was Winston Churchill
00:08:43.960 born?
00:08:44.960 They own that as well.
00:08:45.960 Soak.com, which Soak.com is ... how do you describe what Soak.com is?
00:08:50.100 It's a form of what?
00:08:51.100 It's an e-commerce platform like comparable to who?
00:08:54.940 Can we say it's similar to like a Google or an Amazon in the Middle East?
00:09:00.400 It's a form of Amazon in the Middle East, right?
00:09:02.820 Prime Video budget, by the way, so those are some of the companies they own.
00:09:05.580 There's more I'm just giving you.
00:09:06.580 Some of them.
00:09:07.580 They also own Prime Video, right?
00:09:09.640 Their budget for Prime Video of what they want to do every year is $4.5 billion.
00:09:13.820 HBO's is $2 billion.
00:09:16.360 And they're not even trying ... I watched a movie the other day, Honey Boy, Shia LaBeouf's
00:09:20.320 Story.
00:09:21.320 It was on Prime.
00:09:22.120 Because I'm Prime, I was able to get on ... I'm like, Amazon is everywhere.
00:09:25.680 Now watch with Walmart.
00:09:26.820 Walmart.
00:09:27.820 Walmart owns Sam's Club.
00:09:29.580 Okay, fine.
00:09:30.580 It's pretty much Walmart, right?
00:09:31.580 Walmart owns Flipkart.
00:09:32.580 Walmart owns Jet.com.
00:09:34.580 What is Jet.com?
00:09:35.820 When they bought Jet.com, Jet.com was a form of Amazon.
00:09:39.580 I think they paid like $3.3 billion.
00:09:41.800 What they did is they pretty much took all the employees from Jet.com and they had them
00:09:45.260 work on Walmart.com's website to become a form of Amazon.
00:09:49.220 But it's pretty much Jet.com, a similar model to what Amazon is.
00:09:52.360 And then Walmart also bought Voodoo.com.
00:09:55.240 What Voodoo.com is like Prime.
00:09:57.120 It's like Netflix.
00:09:58.120 It's like Hulu.
00:09:59.120 Because they also want to compete in that marketplace.
00:10:01.120 So they're watching each other because they know these guys are getting close on getting
00:10:05.780 a monopoly.
00:10:07.380 And if they go at the space, it's going to be tough to compete with a company like this.
00:10:10.380 So stay with me here to give you some other data.
00:10:13.000 So where is this whole thing taking place?
00:10:15.040 America spent last year $800 billion on groceries.
00:10:18.100 Only 2% is online.
00:10:20.460 That's why you got Whole Foods and that's why you got Walmart trying to get into that
00:10:23.480 market.
00:10:24.480 That 2% they want to get to 10, 20, 30, 40, 50%.
00:10:27.320 If that gets to 50%, that's $400 billion that's on the line.
00:10:31.880 You don't think Walmart and Amazon wants a piece of that?
00:10:34.580 Here's the other one.
00:10:35.700 Retail.
00:10:36.700 Like whole retail.
00:10:37.860 Whatever we do, retail sales in 2019 was roughly $5 trillion.
00:10:42.720 Retail, we go buy stuff, whole retail.
00:10:44.840 You go to the mall, you go to the store, $5 trillion.
00:10:48.120 Only 10% of that is online.
00:10:50.600 Out of the 10% that's online, you saw $141 is Amazon, right?
00:10:54.240 $5 trillion, only 10% is online, which is $500 billion.
00:10:58.440 This is going to go up and that 10% is going to go up.
00:11:01.260 If the 10% goes to 25%, what's 25% on $5 trillion?
00:11:06.680 That's a lot of money right there.
00:11:08.480 They're trying to compete for that marketplace.
00:11:10.880 It's both of them, all right?
00:11:12.440 And we know how big Walmart is.
00:11:14.360 90% of Americans live within a 10-mile radius of a Walmart and 140 million Americans go every
00:11:19.400 week to Walmart.
00:11:20.400 So where are we going with this?
00:11:21.400 What's the point here?
00:11:22.400 Earlier I told you, David became Goliath.
00:11:26.360 Goliath is trying to become David.
00:11:28.360 Goliath is using the formula of David, their revenues are going higher, profits are going
00:11:33.160 lower because they're reinvesting.
00:11:35.000 But here's what's taking place.
00:11:36.960 Guess what happens when you become the biggest, the best, the baddest?
00:11:39.720 What happens when you become the biggest, the best, the baddest and you start beating
00:11:42.440 people?
00:11:43.660 People that have more experience than you, people that are more educated than you, people
00:11:47.780 that were bigger than you, people that you should have never beaten.
00:11:51.040 What happens when you do that?
00:11:52.900 You start creating enemies.
00:11:54.320 And guess who's creating a lot of enemies?
00:11:56.040 Our dear friends at Amazon.
00:11:57.980 They're creating a lot of enemies.
00:11:59.540 But guess what's happening with Amazon creating a lot of enemies?
00:12:02.220 A lot of people have fallen in love with Walmart.
00:12:05.200 Like who, Pat?
00:12:06.780 Like Google.
00:12:07.780 Google is saying, hey Amazon, we don't like you.
00:12:11.000 We don't like you.
00:12:12.000 We don't want to help Google.
00:12:14.920 We don't want to help Amazon.
00:12:16.420 So Google is saying, no problem.
00:12:18.040 You're competing?
00:12:19.120 We're going to help your enemy.
00:12:20.180 Because an enemy of an enemy is a friend.
00:12:22.060 Okay?
00:12:23.060 An enemy of an enemy is a friend.
00:12:24.400 And Google is coming and saying, look, why don't you sell some of your products on our
00:12:28.420 website?
00:12:29.420 Google's never done this before.
00:12:30.420 Why are they doing this?
00:12:31.420 Because they want to empower these guys.
00:12:33.360 So what's going to be taking place right now moving forward?
00:12:36.580 Here's what I can tell you.
00:12:38.580 If you are looking at these two juggernauts going at it together, who's going to win this
00:12:43.580 heavyweight matchup?
00:12:45.080 A lot of people are saying 100% Amazon.
00:12:48.580 A lot of people are saying 100% Amazon.
00:12:51.420 But those who are saying 100% Amazon, behind closed doors, don't really know what's going
00:12:56.120 on.
00:12:57.180 Those behind closed doors who know what's going on are saying, I don't know.
00:13:01.640 I think these guys are pretty crazy as well.
00:13:03.580 They have a lot of capital.
00:13:05.580 They got a lot of money.
00:13:06.800 They got a lot of physical stores.
00:13:08.420 People want to go to stores and buy food right now.
00:13:10.300 They don't want to go tomorrow.
00:13:11.720 What if these guys use their stores as a fulfillment center?
00:13:16.800 Yes they have 75 fulfillment centers and they got 42.
00:13:19.940 But if you really think about it, Walmart's really got 11,300 formal fulfillment centers.
00:13:25.160 I know it's only 120,000 products that they can sell.
00:13:28.380 But it's the 120,000 most popular products that you want to buy, right?
00:13:32.160 They have that.
00:13:33.160 So what if you can go online and order your groceries, your milk, your food, whatever.
00:13:40.620 20 minutes later, it's delivered to your house.
00:13:42.480 What if you could do that?
00:13:44.220 Because Walmart's only 10 miles away from you, 90%.
00:13:46.840 What if they could do that?
00:13:49.160 That's dangerous over here.
00:13:51.180 Because these guys are trying to get more, what do you call it, the drones, they're trying
00:13:55.240 to get all this technology set up to try to compete with these guys.
00:13:58.540 But it's not a done deal yet.
00:14:01.720 For those that think Amazon's going to crush them, it is not a done deal yet.
00:14:04.740 Look, I'm telling you, Vegas odds are still on Amazon's side.
00:14:07.680 I'm not telling you it's 50-50 odds, absolutely not.
00:14:11.700 Amazon has the favor.
00:14:13.860 Amazon currently is Goliath.
00:14:16.600 But if Walmart starts thinking, wiring, working, innovative, being creative like David, like
00:14:22.260 David, like these guys were David at one point, this could be a very interesting heavyweight
00:14:30.620 fight taking place the next 5, 10, 15 years that you and I get to witness.
00:14:34.500 I mean, you and I get to watch, see this taking place.
00:14:37.180 We saw Ali Frazier.
00:14:38.680 You know, we saw Holyfield Tyson.
00:14:40.560 We saw some good fights, Fury Wilder.
00:14:43.700 This is a real heavyweight fight.
00:14:45.780 Because this is 650,000 juggernaut going against 2.2 million juggernaut.
00:14:51.680 So before you say, Amazon's going to kill everybody, know that a lot of Amazon's enemies behind
00:14:57.860 closed doors are now helping these guys beat these guys.
00:15:02.500 Thanks, everybody, for listening.
00:15:03.800 And by the way, if you haven't already subscribed to Valuetainment on iTunes, please do so.
00:15:08.540 Give us a 5-star, write a review if you haven't already.
00:15:11.440 And if you have any questions for me that you may have, you can always find me on Snapchat,
00:15:15.440 Instagram, Facebook, or YouTube.
00:15:17.400 Just search my name, PatrickBitDavid.
00:15:19.300 And I actually do respond back when you snap me or send me a message on Instagram.
00:15:24.140 With that being said, have a great day today.
00:15:25.960 Take care, everybody.
00:15:26.700 Bye-bye.