There’s a better way, and Amazon wants to be the one to provide it. Nearly two weeks after stirring up the food delivery space, Amazon is spreading fear to another industry — paying up big time to acquire a health care company.

What happens when you don’t succeed?

Throw more money at the problem. Amazon’s first attempt at healthcare — a joint venture with JPMorgan and Berkshire Hathaway — was shut down after three years. Failures aside, Amazon continued its healthcare expansion.

• In 2018, Amazon acquired online pharmacy PillPack for $1B.
• Earlier this year, Amazon expanded its Amazon Care service nationwide.

Now it’s acquiring One Medical (NASDAQ:ONEM) — a network of in-person and virtual primary care providers — for $3.9B.

But Amazon’s healthcare business is still minuscule compared to the rest of its business — unlikely to have a major impact on earnings or its stock price in the short term.

Americans spent $4.1T on healthcare in 2020

It’s a massive market for companies that can successfully break in. But many have tried and failed (i.e., Alphabet, IBM, Microsoft) and breaking in proved to be difficult.

Startups tackled the problem with tech — offering virtual healthcare services, which became popular during COVID.

• Cash-burning startups capitalized by going public — just to see their stock prices crash as markets reversed.
• One Medical was part of that group. After going public in 2020,ONEM
  cratered nearly 90% before the acquisition.

Pharmacy operators saw it as an opportunity to expand both physically and virtually as in-person physician visits rebounded. Walmart, Walgreens and CVS are all making major health care expansions — opening more clinics and launching virtual offerings.

Investors: Upcoming earnings in question

Amazon reports earnings next week, but the outlook is anything but clear.

• Slowing e-commerce: Data from Amazon Prime Day showed record sales — but per Mastercard’s June data, e-commerce sales rose only 1.1%,, while in-store grew 11.7% compared to the previous year.
• Cost uncertainty: Amazon’s retail business has been hammered by high labor, fuel and freight costs — and the Justice Department is investigating its warehouses for worker safety.

Inflation, post-COVID shopping habits and recession fears created the (im)perfect storm on e-commerce. The forecast is cloudy, and investors are flying into earnings blind.