Shares of E-Commerce giant Amazon.com soared to a new all-time high overnight, topping US$719 at one point before closing at US$713.23. The shares have risen a little over 64% over the last 12 months and an incredible 1,935% in the last decade, according to Google Finance.

Unlike the advance of shares in many technology shares however, the rise of Amazon.com shares certainly seems justifiable. From pioneering the online bookstore concept in the beginning stages, Amazon.com has gone on to become the ‘Everything Store’, while it has also tested the waters in a number of other categories. Amazon Web Services, for instance, has been a huge hit.

Focusing solely on retail however, Amazon.com is in the box-seat position to benefit as shoppers around the world do a growing amount of their shopping online. It’s convenient, allows for a huge product range, and having everything under one roof means less overheads than a bricks-and-mortar retailer.

The end result is a more affordable product for the consumer than they could otherwise get at other stores, thus fulfilling the motto of Jeff Bezos – who is the founder and CEO of Amazon.com: “Your margin is my opportunity”.

While Amazon.com’s dominance in the United States and around other parts of the world is becoming increasingly obvious (based on its sales, compared to the sales of various other brick and mortar retailers), Australian retailers are yet to feel the full impact, and that is something investors in the sector should be wary of.

As highlighted by my colleague, Edward Vesely, Jeff recently paid a brief visit to Sydney, sparking speculation that Amazon.com may be looking to expand the company’s presence in the Land Down Under.

Now, it’s worth noting that Australia is a completely different market than somewhere like the United States. With a much smaller population, we’re also more spread out which could make the economics enjoyed by Amazon.com elsewhere in the world more difficult to achieve.

In saying that, however, there is still reason to be very cautious of the E-Commerce giant.

Richard Goyder, managing director of Wesfarmers Ltd (ASX: WES) said so himself when he said Amazon will “eat all our breakfasts, lunches and dinner” unless local retailers can improve their competitiveness and become more innovative, according to The Sydney Morning Herald.

Indeed, companies such as Myer Holdings Ltd (ASX: MYR) are already struggling to remain relevant. Others, including JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) are delivering much stronger performances, but could see their margins impacted should Amazon.com increase its focus on expanding locally.

Personally, I still like JB Hi-Fi as a business (although, I don’t own shares), but Amazon.com’s potential ramp-up into the Australian market is certainly something investors need to bear in mind.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Amazon.com. Motley Fool contributor Ryan Newman owns shares in Amazon.com. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.