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The Founder's Notes

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The template only earns its keep if you actually put two cases next to each other.

This is the reason every teardown answers the same questions in the same order. Put a luxury house beside a console platform and the differences stop being vibes — one is refusing sales to protect a price, the other is selling below cost to collect a toll, and both are defending a moat.

Retail · BME: ITX

Inditex (Zara)

Designs, makes and sells its own clothes through its own stores, gets a new idea from sketch to shelf in about two weeks, and spends almost nothing telling anyone about it.

Technology · NASDAQ: AMZN

Amazon

Runs a near-breakeven retail operation at enormous scale, and earns essentially all of its profit from renting out the two things that operation forced it to build — computing capacity and shelf placement.

The thesis in one line

Every other fashion company guesses what you will want in nine months. Zara waits to see what you bought on Saturday.
The store is not the business. The store is the customer acquisition cost for the businesses.

Verdict

Own it
Own it

Moat

Wide

Process power · Scale economics · Distribution

Wide

Scale economics · Network effects · Process power · Switching costs

Porter's five forces

Competitive rivalry
Threat of new entrants
Threat of substitutes
Buyer power
Supplier power
Competitive rivalry
Threat of new entrants
Threat of substitutes
Buyer power
Supplier power

Headline figures

Net sales
€38.6B
Gross margin
57.8%
Sketch to shelf
≈ 15 days
Advertising as a share of sales
≈ 0.3%
Net sales
$638B
AWS share of operating income
~58%
Retail operating margin
~5.4%
Third-party share of units
~60%

Unit economics

One Zara dress at €39.95

The €17 is higher than a competitor's on purpose. Inditex pays extra to make the dress nearby and quickly, and earns it back by not marking it down — a 57.8% gross margin in FY2024 that no mass-fashion rival has matched.

One $50 third-party item sold through Amazon

Amazon captures roughly 38% of the sale price and carries none of the inventory risk. The seller took the risk, paid for the warehouse, and then paid again to be found in a search of Amazon's own catalogue.

What would change her mind

If gross margin falls below 55% for two consecutive years, the proximity model has stopped paying for itself and the company has begun to compete on price — which is the one game it has never had to play. Equally, if like-for-like sales growth in the refitted flagships stalls while online keeps growing, the store was never the marketing after all, and the model needs a different explanation.
If AWS revenue growth falls below 15% for two consecutive quarters while segment operating margin also declines, the cloud business is being commoditised rather than merely contested, and the capex is being spent defending share rather than buying growth. That combination — decelerating growth and compressing margin at the same time — breaks the thesis outright. A single weak quarter on either measure alone does not.

1 mechanism in common

vertical integration