Here are some impressive facts about Amazon and how they make so much money:
- Net Revenue: In 2020, Amazon reported a net revenue of $386 billion, an impressive increase of 38% compared to 2019. The company's diverse revenue streams, including e-commerce, Amazon Web Services, and advertising, have contributed to this exceptional growth.
- Amazon Web Services (AWS): In 2020, AWS generated $45.4 billion in net sales, accounting for 12% of Amazon's total revenue. AWS is the world's leading cloud computing provider, powering millions of businesses worldwide with its scalable and reliable infrastructure services.
- Third-Party Seller Services: Third-party sellers accounted for 54% of paid units sold on Amazon in 2020. The company made $80 billion from these services in 2020, earning money through commissions, subscription fees, and fulfillment services like FBA (Fulfillment by Amazon).
- Prime Membership: As of 2021, Amazon Prime had over 200 million subscribers globally. With an annual fee of $119 (or $12.99/month), Prime membership generates significant recurring revenue while encouraging customer loyalty and increasing overall spending on the platform.
- Advertising Business: Amazon's advertising business brought in more than $21 billion in 2020. As the third-largest digital advertiser in the United States, Amazon capitalizes on its vast customer data and targeted advertising capabilities to generate revenue from sponsored products, display ads, and video ads.
- Physical Stores: As of 2021, Amazon operated over 600 physical retail locations, including Amazon Go, Amazon Books, Whole Foods Market, and Amazon 4-star. These stores not only drive sales but also offer valuable customer insights and serve as testing grounds for new retail technologies.
- Expansion and Diversification: Amazon's constant expansion into new markets and industries, such as healthcare (Amazon Pharmacy), entertainment (Amazon Studios), and logistics (Amazon Air), has allowed the company to increase its revenue sources and maintain a competitive edge. By staying at the forefront of innovation, Amazon continues to dominate the market and grow its financial prowess.