The strength in everyday essentials revenue is a positive indicator that customers are turning to us for more of their daily needs," said Amazon's Chief Financial Officer Brian Olsavsky. "We see that when customers purchase these types of items from us, they build bigger baskets, shop more frequently and spend more on Amazon."
In August, Amazon CEO Andy Jassy said average selling prices were falling because customers were trading down to cheaper items and buying more essential goods... sales of bigger ticket items like computers and electronics were growing 'more slowly' than in a robust economy.
To offset the impact of lower average selling prices, Amazon is relying on its deep network of local warehouses that allows it to ship quickly. It's 'pretty easy to choose to supply' lower average selling price (ASP) merchandise, but much harder to be able to afford to supply them, Jassy said on Thursday.
John Belton, portfolio manager at Gabelli Funds which owns Amazon shares, said that he is expecting more pressure on Amazon's selling prices in the fourth quarter because of the company's mix of products.
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