Amazon profits tumble as it continues to invest

Net income came in at $63m (£39m), while net sales increased 44% to $10.9bn (£6.8bn) in the quarter ending September 30.

Amazon UK boss Chris North said the it was fastest rate of sales growth the online giant had experienced since 2000.

He said: “We’re making substantial investment across our infrastructure. We’re investing in expansion in the UK. Our focus is on the long-term, we’re prepared to take whatever effect it has on short-term profits.”

The etailer will have opened two new fulfillment centres in the UK this year and is to build another one in Hemel Hempstead next year. The retailer is looking to add 4,000 jobs to its UK operation.

The US retailer’s international arm - which includes its U.K, German, Japanese, French, Chinese, Italian and Spanish sites – sales grew 44% to $4.94bn (£3.08bn) over the first quarter.

In the period Amazon UK has introduced collection lockers in convenient locations including shopping centres and train stations, as revealed by Retail-Week.com.

Amazon.co.uk introduced the “all-new Kindle - the lightest, fastest and most affordable Kindle ever at only £89”. North said orders for the new device were greater than the original model and e-books are now outselling harbacks by three to one.

The etailer opened a 700,000 sq ft fulfillment centre at Towers Business Park in Rugeley in the quarter, and will open a second in Dunfermline which is due to open in November.

In Amazon’s North America business - comprising its U.S and Canadian sites – sales were up 44% to $5.93bn (3.70bn).

Amazon launched its new Kindle Fire tablet in the US, which is yet to launch in the UK.

Amazon expects net sales across the group to rise by between 27-44% in the fourth quarter.

Amazon founder and chief executive Jeff Bezos said:  “September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days - we introduced Kindle Fire for $199 (£124), Kindle Touch 3G for $149 (£93), Kindle Touch for $99 (£62), and our all new Kindle for only $79 (£49).

“In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions more than we’d already planned.”