The Briefing
- While a majority of Amazon’s revenue comes from online sales, the company has several other business segments that generate billions of dollars in revenue
- The largest business segment following online sales is third-party selling services
How Amazon Makes Its Money
With a market cap of $1.7 trillion, Amazon is the most valuable retailer in the world. But the company has grown into more than just an online store.
Amazon is now the proud owner of multiple billion-dollar revenue streams—but what are these different business segments, and how much does each unit contribute to the company’s overall revenue mix?
Here’s a look at Amazon’s different business segments, and how much each contributed to the company’s total revenue in 2019 (which was a casual $281 billion):
| Business Segment | Percent of Revenue (2019) |
|---|---|
| Online stores | 50.4% |
| Third-party seller services | 19.2% |
| Amazon Web Services (AWS) | 12.5% |
| Subscription services | 6.9% |
| Physical stores | 6.1% |
| Other | 5.0% |
While online stores generated the highest amount of revenue at 50.4%, third-party seller services made up a significant portion as well, making up 19.2% of the total.
Third-party selling has seen significant growth over the years—in 2018, it accounted for 58% of Amazon’s gross merchandise sales, which is a vast increase compared to 2000, when it made up merely 3%.
Amazon Web Services (AWS) is the third most important revenue stream, contributing 12.5% to the overall mix. However, despite contributing a relatively small percentage to total revenue in 2019, AWS made up a large portion of Amazon’s operating income, making it the key to the company’s overall profitability.
>> To learn more, read our full article on How Big Tech Makes Their Billions.
Where does this data come from?
Data was sourced from directly from Amazon’s 2019 SEC filing.
The post How Amazon Makes Its Money appeared first on Visual Capitalist.
Read more https://www.visualcapitalist.com/how-amazon-makes-its-money/