Here’s How To Get Amazon’s Profitable Growth At One Third The Price

The concept of “the cross-price elasticity of demand,” may sound like something just for econ nerds, but I assure you that it’s very profitable for you as well.

And my own experience earning an honors economics degree and serving as a college teaching assistant in the subject can make it pretty painless too.

Simply stated, cross-price elasticity of demand means that, if whiskey is expensive relative to beer, more people will buy the latter.

But what if there was a hidden way to get the equivalent of whiskey at beer prices? I don’t know about you but I’m on board with that.

Just take a look at Amazon.com Inc. (AMZN). The King of Ecommerce trades at about $3,130 a share.

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Image Source: Unsplash

But there is another leader in the same space whose stock costs less than one-third of AMZN even though its earnings are growing 10% faster.

Let me show you why this market crusher could double again in less than two years…

The Third-Party Connection

Now then, as the holiday shopping season gets underway, the conventional wisdom on Wall Street would be to buy Amazon and leave it at that.

But we’re not about following the herd. I’ve racked up more than 200 double or triple-digit wins in recent years in no small measure by going against the grain.

That’s how I came across the stock we’re talking about today. Turns out, it’s actually been a big part of Amazon’s success.

See, nowadays Amazon relies on hundreds of other companies to sell thousands of items through the e-commerce giant’s own unbeatable storefront.

This has been crucial to Amazon’s success because, on its own, it would have taken Amazon years to set up that diverse a product range.

And the importance of these “third-party” sellers to Amazon’s success is growing and has more than doubled in about 13 years.

Back in 2007, just 26% of Amazon’s sales came from third-party sellers. In the third quarter, that number was at 54%.

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