Amazon's rising fulfilment costs

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The rise and rise of Amazon may not be as effortless as it sometimes appears. It’s certainly got massive: revenues of $75bn are predicted for 2013, but its first quarter results show it operating on a wafer-thin 0.5% margin. Part of the problem is that the traditional economies of scale that retailers enjoy as they expand seem to work in reverse in e-commerce – as it grows bigger, its fulfilment costs as a percentage of sales also increase.