Amazon has a long history of failing

Analysts give Amazon.com Inc. (Nasdaq: AMZN) a lot of credit these days.

The company alone can disrupt a business environment overnight… or at least that’s what analysts would have you believe.

Amazon’s latest market-moving announcement was that it was close to deciding to enter the online pharmaceutical drug market.

Let me repeat that.

Amazon is “close to deciding.” It hasn’t even been decided yet.

But that didn’t stop stocks like CVS Health Corp. (NYSE: CVS) from falling in the days after the news. It’s as if analysts think that everything Amazon touches automatically changes forever.

That is simply not the case.

The reality is that Amazon is not afraid of failure. That is what has made the company the giant it is today.

But it has also given Amazon a long history of failing when it comes to entering a new market.

As I’ll show you in a second, there are plenty of failures as examples.

But it is this history of company failure that makes me see these attempts to enter new markets as an opportunity to buy the same shares that were sold in the announcement, despite what analysts say.

Let me explain…

Epic fail

I’ll start with a list of Amazon’s failings over the years, as they don’t seem to come up often when an analyst praises the company.

The Fire Phone is probably the biggest.

Expected to compete with the iPhone and Samsung phones, and received a lot of praise early on from Amazon users, it ended up being a huge flop. At one point, Amazon couldn’t even give the phone away for $0.99. Amazon wrote off $170 million for its failed attempt to enter the smartphone market.

It launched Destinations in 2015 to be a marketplace for hotel deals. This failed in just six months.

Amazon Local launched in 2011 to compete with Groupon and LivingSocial. That was considered a failure in 2015.

Amazon Wallet was a mobile wallet to compete with Apple Pay and Samsung Pay. After only six months on the market, it was closed and considered a failure.

Amazon Local Register was created to compete with Square Reader, an attachment on your mobile device to accept credit cards. In 2016, this product was shut down and was also rated as a glitch.

And these are just some of their failed forays into new markets.

Some other failed attempts are Music Importer, TestDrive, WebPay, Endless.com, Askville, and Kozmo.com. This list does not include failed ideas that never made it to market, or ideas that are currently on the market but have failed miserably to meet analyst expectations.

For example, Amazon entered the food delivery space in 2015, trying to make companies like GrubHub Inc. (NYSE: GRUB) irrelevant. But GrubHub still controls about half of that market thanks to a recent acquisition, compared to Amazon’s 11% market share.

And then there are the handmade products.

Amazon entered this market in 2015 with Handmade at Amazon, and analysts were sure it would be the end of Etsy Inc. (Nasdaq: ETSY). But Etsy, the first to make widely marketable homemade products that Amazon was pursuing, continues to thrive, with sales growth expected to exceed 15% each year for the next three years.

To Amazon’s credit, it has done a few things right, like selling books, an online marketplace, and the cloud.

But the list of things he’s been wrong about is much longer.

That’s why when Amazon wants to enter a new market, it doesn’t faze me.

A lot of red tape for Amazon

And that brings me to your opportunity today.

With Amazon’s mention of the pharmaceutical drug space, CVS dove into the news.

Look: Even if Amazon makes that move into the pharmaceutical drug market, it doesn’t mean everyone suddenly stops going to CVS.

CVS is the largest and most diversified pharmacy chain in the US With 9,700 pharmacies nationwide, it also has more than 1,000 MinuteClinics so patients can get seen quickly for minor problems without having to go out of their way to going to a doctor’s office – which I think we can agree everyone hates doing.

In addition to being able to get a disease check at the pharmacy, you can fill your prescriptions almost immediately.

CVS also has a mail-order segment, which is what Amazon wants to compete with, and a long-term care focus, among other special needs.

I know Amazon is all about online sales. But there’s a lot of red tape, which I’m sure is what Amazon is looking at, about leaving pain medication on someone’s doorstep: Most regulators don’t want the pills ending up in anyone’s hands.

So there’s a wall of red tape around that process, and CVS and others are working to overcome that as well. So Amazon won’t be alone there.

That’s why I still like to have CVS even if Amazon enters the market. Because as Etsy, GrubHub, and the myriad other Amazon flops have shown, not everything Amazon touches gets discontinued.

And at this point, Amazon may still avoid this market altogether, and that announcement could see CVS explode higher practically overnight.