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Xero's profits add up | Amazon bags a Haul | Shopping spree for Shopify shares · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Friday, the fifteenth
• 0:09
  Speaker 2: of November.
• 0:09
  Speaker 1: Does he boy?
• 0:10
  Speaker 3: We know that Donald Trump won the presidential election last
• 0:13
  Speaker 3: week and now he's elected Elon Musk to a newly
• 0:16
  Speaker 3: formed government department named Department of Government Efficiency or it's
• 0:21
  Speaker 3: called by a zachronym doge. Next minute, Elon's favorite crypto coin,
• 0:25
  Speaker 3: doge coin, jumps by eighty nine percent.
• 0:27
  Speaker 1: Coincidence, highly unlikely.
• 0:30
  Speaker 2: We live in an upside world, be man, yep, Flux
• 0:32
  Speaker 2: have every single week, we dropped three business or finance
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  Speaker 2: questions on a Friday and the first person to answer
• 0:37
  Speaker 2: them correctly with a cold hard fifty dollars cash to
• 0:40
  Speaker 2: start off the weekend. So if you want to win
• 0:41
  Speaker 2: fifty bucks to kick off the weekend on a high,
• 0:43
  Speaker 2: make sure to download the Flux app, turn your notifications on,
• 0:46
  Speaker 2: and had your sharpest brain ready to rumble.
• 0:48
  Speaker 3: So you can win at money three triumphant stories today,
• 0:53
  Speaker 3: Dozy boy, let's do it for our first zero. The
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  Speaker 3: ASX listed accounting software has seen at share price jump
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  Speaker 3: to a record high despite slowing subscriptions.
• 1:03
  Speaker 2: Nothing like accounting numbers and figures to get the juices flowing, Beman,
• 1:06
  Speaker 2: so tell me more.
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  Speaker 3: Well, Zero with an X is the accounting software that
• 1:10
  Speaker 3: was actually founded in New Zealand in two thousand and six.
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  Speaker 2: It was one of the og accounting platforms to launch
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  Speaker 2: in the cloud when others were still on cd.
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  Speaker 3: ROM, and it grew from a humble New Zealand based
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  Speaker 3: company to a global accounting giant with over four point
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  Speaker 3: two million subscribers.
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  Speaker 2: And now Bman Zero's announced its operating earnings jump by
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  Speaker 2: fifty percent to over three hundred and eleven million New
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  Speaker 2: Zealand dollars over the past six months.
• 1:32
  Speaker 3: Now, this is because they've jacked up the price of
• 1:34
  Speaker 3: subscriptions and grown subscriptions overall by six percent.
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  Speaker 2: But Beman subscriber growth in North America actually fell.
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  Speaker 3: So juse wait, while their growth may have slowed a
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  Speaker 3: bit in some places, they've really been keeping an eye
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  Speaker 3: on their numbers.
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  Speaker 2: In particular the rule of forty number.
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  Speaker 1: Oh yes, So what is the key learning here?
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  Speaker 2: The rule of forty is the idea that a software
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  Speaker 2: company's growth rate and its profit margin should exceed forty
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  Speaker 2: percent when combined. Now, simply that could mean twenty percent
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  Speaker 2: growth rate and twenty percent profit margin or that could
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  Speaker 2: mean thirty per cent growth rate, ten percent profit margin
• 2:05
  Speaker 2: and jusboy.
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  Speaker 3: In recent years, the rule of forty has been used
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  Speaker 3: pretty widely by software companies around the world.
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  Speaker 2: We're talking Salesforce and Adobe and even Zoom now be man.
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  Speaker 2: Back in November last year, Zero announced their plans to
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  Speaker 2: achieve the rule of forty. But at the time they
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  Speaker 2: were sitting pretty at thirty three percent.
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  Speaker 3: But by May twenty twenty four, Zero cracked over the
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  Speaker 3: forty percent mark for the first time.
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  Speaker 2: And now they've hit forty four percent in the most recent.
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  Speaker 3: Huh So, despite slowing subscriber numbers, investors have confidence that
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  Speaker 3: Zero is hitting its main goal.
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  Speaker 2: For our second story, Amazon has launched an ultra low
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  Speaker 2: cost platform called Amazon Hall to compete head on against
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  Speaker 2: Shean and TIMU.
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  Speaker 3: Got a bit of Facebook and TikTok about it. Don't
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  Speaker 3: you reckon, judziboy. This battle is just beginning. So have
• 2:47
  Speaker 3: you got that popcorn out?
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  Speaker 1: I know you do, he tell me.
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  Speaker 2: More so, man, we know that Amazon Ahavason might have
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  Speaker 2: started as an online bookstore, but it's now the world's
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  Speaker 2: largest e commerce company.
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  Speaker 1: We're talking turning over billions per annim in products that.
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  Speaker 2: Be man Over the six years, Timu and she In
• 3:01
  Speaker 2: have vented the US, they vented the UK, Australia and
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  Speaker 2: many other countries in the Western world as well.
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  Speaker 3: Now, the appeal for these platforms from consumers is not quality.
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  Speaker 2: It's certainly not delivery times.
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  Speaker 1: And certainly not customer service.
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  Speaker 2: Juz boy, No, no, no, It is all about pricing,
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  Speaker 2: scarily cheap pricing that is eaten into Amazon's market.
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  Speaker 3: So now Amazon has launched a new online store called
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  Speaker 3: Amazon Hall with heavily discounted items.
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  Speaker 2: Even designed to mimic she In and Timu, with emojis
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  Speaker 2: like rocket ships or fire to show urgency and low prices.
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  Speaker 3: And juzzy boy unlike Amazon's traditional one day delivery times.
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  Speaker 3: Amazon has conceded that with lower prices comes slower shipping.
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  Speaker 2: But they claim this is responding to customer demand ultra
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  Speaker 2: low price goods, even if it means slower shipping.
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  Speaker 3: But Amazon is hoping Hall will add incremental revenue through
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  Speaker 3: a new market segment.
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  Speaker 2: So what is the key learning here?
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  Speaker 3: Market segmentation is where a business creates unique offerings to
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  Speaker 3: target different customer groups. Now, Beman, Amazon's ultimately segment venting
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  Speaker 3: the customers in the costs their speed buyers so juzyboyd.
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  Speaker 3: By offering ultralow cost items with slower shipping times, Amazon
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  Speaker 3: is appealing to price sensitive shoppers.
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  Speaker 2: Particularly younger consumers who are currently shopping on platforms like
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  Speaker 2: Timu and she.
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  Speaker 3: In fact, a study by our friends at eMarketer revealed
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  Speaker 3: that forty four percent of US gen z is make
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  Speaker 3: at least one purchase on she In every month, and
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  Speaker 3: forty one percent do the same on Teamu.
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  Speaker 2: How can you not buy a mesh laundry bag for
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  Speaker 2: one dollar? More cleaning products that definitely.
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  Speaker 1: Don't work for Amazon.
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  Speaker 3: The key to success will be its ability to differentiate
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  Speaker 3: Amazon Hall from its standard offering.
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  Speaker 2: And also ensure that it a're alienating its larger base
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  Speaker 2: of customers.
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  Speaker 3: For our third and final story, Shopify has seen at
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  Speaker 3: share price spike more than twenty six percent after its
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  Speaker 3: income more than doubled in the most recent quarter.
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  Speaker 2: Holy smokerinees their high share price is January twenty twenty two.
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  Speaker 1: So tell me more, b man, well, juziboy, some background
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  Speaker 1: for you.
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  Speaker 3: Shopify is the e commerce platform that helps people and
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  Speaker 3: businesses create online stores.
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  Speaker 2: Yep, your old school Delhi that finally makes its way
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  Speaker 2: into the world wide Web, probably Shopify.
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  Speaker 3: But also some big name brands are on there like
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  Speaker 3: Hines and Fitbit and Sephora, as well as another one
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  Speaker 3: point seven million businesses around the world.
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  Speaker 2: Now, be man at Shopify is a now a mega
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  Speaker 2: jump in its third quarter earning.
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  Speaker 3: Yeah, we're talking a jump of one hundred and thirty
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  Speaker 3: two percent in operating income.
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  Speaker 2: That's year on year, Juzzy boy and be Man. What
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  Speaker 2: was the reason for its revenue and income growth?
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  Speaker 3: Well, Shopify saw its gross merchandise volume increase twenty four
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  Speaker 3: percent for the quarter to nearly seventy billion US dollars.
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  Speaker 2: And be Man, That ain't it? Because it also reckons
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  Speaker 2: it will see even more growth in the next quarter.
• 5:33
  Speaker 2: They can see the future, con't they, Juzzy boy. So
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  Speaker 2: I'm wondering what is the key learning here? GMV, or
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  Speaker 2: gross merchandise volume, is a key metric used by e
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  Speaker 2: commerce companies to measure the total value of goods sold
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  Speaker 2: through their platform.
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  Speaker 3: Now, GMV has become an important indicator of how much
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  Speaker 3: activity is happening on the platform.
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  Speaker 2: For Shopify, GMV aligns closely with the success of its merchants.
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  Speaker 3: That's because the higher the GMV, the greater the volume
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  Speaker 3: of transactions that Shopify facilitates. For Shopify, they have two
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  Speaker 3: key ways to really increase that GMV.
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  Speaker 2: They can increase the number of merchants on their platform,
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  Speaker 2: or a.
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  Speaker 3: Juzzy Boy, they can see an increased value of goods
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  Speaker 3: sold from each merchant.
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  Speaker 2: And right now it seems like Shopify is achieving both
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  Speaker 2: and that's why.
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  Speaker 3: Investors are pretty down excited by these results.
• 6:15
  Speaker 2: Be man a hot little tip that doge coin discussion
• 6:17
  Speaker 2: we at the beginning of the pot and that may
• 6:19
  Speaker 2: or may not be one of the questions in Quick
• 6:21
  Speaker 2: six today. So fluxdam if you want to win fifty
• 6:23
  Speaker 2: bucks and kick up your weekend and a HI, make
• 6:25
  Speaker 2: sure to download the Flux out purne your notifications on
• 6:27
  Speaker 2: to win at money.
• 6:29
  Speaker 1: Love It juzzy boy. Thanks for listening and we'll see
• 6:31
  Speaker 1: you on Monday.