When we think of e-commerce success, our mind goes automatically to Amazon self-built empire. But is that really so?
As an Amazon customer myself, I know they make tons of money on a daily basis, but I’m really curious to see exactly where does that money come from. Apparently, it’s not only coming from my Prime subscription!
Amazon is worth an incredible 427 billion US dollars, almost double of Walmart’s net worth and a world away from Macy’s, Target and other regular retailers. More so, Amazon’s market reign will only grow: by 2021, the business will have grown around 50%.
it wasn’t always this good for the business: Amazon has long been maligned for its inability to produce money. In 2012 and 2014, Amazon had constant negative net profits, even after selling A LOT of stuff. Why is this? To put it shortly, retail isn’t a very profitable niche, and with all the shipping, warehouses and buying, money goes down the drain quickly.
In 2017, Amazon turned a corner, showing that it had 10 quarters in a row of sustained growth and positive net worth. How did they do it? By expanding to the non-retailer business. Amazon Web Services (AWS for short) are now the company’s biggest money-making branch, and while they sell online 24/7, web hosting is all profit and no loss.6.4k