The launch of GoPro’s Hero5 series of cameras has hit a little bit of a roadbump thanks to a disagreement with Amazon. The action camera maker announced the Hero5 Black and Hero5 Session cameras in September, releasing them for distribution at the start of this month.
However, on Thursday 13 October, GoPro said that Amazon was currently carrying neither item. Following this news, GoPro’s shares fell by as much as 3. 8%. This was also the company’s worst weeklong fall in shares since May.
Fortune reports that the issue likely stems from a disagreement over pricing namely Amazon potentially listed a lower purchase cost for the Hero5 than was agreed on. Though that may sound like a minor issue on the surface, if Amazon instituted even a relatively minor cut below the agreed-upon floor price that would have potentially huge knock-on effects for GoPro’s profits. Not only does Amazon account for around 12-14% of GoPro’s total sales revenue but US big-box retailers such as Best Buy and Target routinely set their prices to match e-commerce platforms such as Amazon’s. Overall, GoPro makes over half of its profits from the US alone and estimates say this current blip with Amazon may have cost the company a shortfall of US$100 million.
According to a GoPro statement, the situation is only temporary, however, and GoPro will recommence supplying units to Amazon by the end of October or at the start of November. According to analysts, this isn’t catastrophic for GoPro, with the silver lining being that if this was going to happen, it probably was the best time of year for it to happen. Oppenheimer analyst Andrew Uerkwitz told Fortune Magazine: “September or early October is a slow sales month anyway as people gear up for the holiday season. ”
. digitalrev.com2016-10-14 03:00