Seven Amazon Statistics That Break Down Its Business Model

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Seven Amazon Statistics That Break Down Its Business Model

Online stores still represent the backbone of the Amazon business model with almost $124 in revenues for 2018
Amazon has a diversified business model. In 2018, online stores contributed to nearly 52% of Amazon revenues, followed by Physical Stores, Third-party Seller Services, AWS, Subscription Services, and Advertising revenues
In 1999 Amazon third-party sales contributed to only 3% of Amazon gross merchandise sales
Amazon third-party sales contributed to 58% of the total gross merchandise sales on Amazon in 2018
Amazon AWS is the fastest growing business unit, with over $25 billion in sales in 2018 and over $7 billion in operating margins
Amazon is grabbing a growing piece of the digital advertising cake, with about $10 billion in revenues from advertising in 2018
Amazon core business is in the US with over $160 billion in revenues in 2018, but it is diversified globally

Amazon revenue breakdown for 2016-2018

Amazon has a diversified business model that relies on several revenues streams. At its core, the online stores are still the primary revenue streams.

Followed by Physical Stores, Third-party Seller Services, AWS, Subscription Services, and Advertising revenues.

data in million dollars
2016
2017
2018

Online Stores
91,431
108,354
122,987

Physical Stores
—
5,798
17,224

Third-party seller services
22,993
31,881
42,745

Subscription services
6,394
9,721
14,168

AWS
12,219
17,459
25,655

Other (Primarily Advertising)
2,950
4,653
10,108

data in million dollars
Revenue Breakdown (2018)

Online Stores
122,987

Physical Stores
17,224

Third-party seller services
42,745

Subscription services
14,168

AWS
25,655

Other (Primarily Advertising)
10,108

Amazon third-party sales vs. Amazon first-party sales

Over the years, Third-party sales have grown from 3% of the total to 58%. Amazon helped independent sellers compete against its first-party business by investing in and offering them selling tools (inventory management, payments processing, shipments tracking, reporting).

Programs like Fulfillment by Amazon and the Prime membership program improved the customer experience of buying from independent sellers, which made this business grow substantially over the years. In 2018, gross merchandise accounted for 58% of the total Amazon online sales.

Year
Third party sales

First party sales

1999
3%
97%

2000
3%
97%

2001
6%
94%

2002
17%
83%

2003
22%
78%

2004
25%
75%

2005
28%
72%

2006
28%
72%

2007
29%
71%

2008
30%
70%

2009
31%
69%

2010
34%
66%

2011
38%
62%

2012
42%
58%

2013
46%
54%

2014
49%
51%

2015
51%
49%

2016
54%
46%

2017
56%
44%

2018
58%
42%

Amazon all segments margins vs. Amazon AWS

Amazon AWS is among the fastest growing Amazon business unit. With its scalable infrastructure, AWS grew to over $25 billion in revenues in 2018.

Also, AWS carries high operating margins compared to the rest of the Amazon business model. Indeed you can see from the graphic below, how AWS contributed to 58.7% of Amazon overall operating income, in 2018.

data in billion dollars
Revenues
Operating Income

All segments (except AWS)
$123B
$5.1B

AWS
$25.7B
$7.3B

data in million dollars
Operating income

All Segments
5,125

AWS
7,296

Amazon advertising business compared to Facebook, Google, and Bing

To put things in context, Amazon advertising business has been growing substantially, and not it competes with other media tech players, like Google, Facebook, and Microsoft.