amazon-revenue-breakdown

Amazon Revenue Breakdown

Business / By / February 6, 2023
Amazon Revenue BreakdownOnline storesPhysical storesThird-party seller servicesSubscription servicesAWSAdvertisingOther
2022$220B$18.96B$117.71B$35.22B$80B$37.74B$4.25B
FourWeekMBA Analysis
Key Facts
FounderJeff Bezos
Year & Place FoundedJuly 5, 1994, Bellevue, WA
Year of IPO5/15/1997
IPO Price$18.00
Total Revenues at IPO$15.75 million
Total Revenues in 2021$469.8B
Amazon Employees1,608,000 full-time and part-time employees
Revenues per Employee$292,177.86
Jeff Bezos founded Amazon, on July 5, 1994, in Bellevue, WA. The company IPOed in 1997, at a price of $18 per share, and it recorded over $15 million in revenues, prior to the IPO. In 2021, Amazon generated $469.8B with 1,608,000 full-time and part-time employees, generating $292,177.86 revenues per employee.
Amazon AWS$62
Microsoft Intelligent Cloud$60
Google Cloud$19.20
Amazon AWS is so far, the largest player, based on revenues, with ha $62 billion in net sales in 2021, compared to Microsoft Intelligent Cloud at $60 billion and Google Cloud at over $19 billion.

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Amazon Business Model

Connected to Amazon Business Model

Amazon Business Model

amazon-business-model
Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services,  Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.

Amazon Mission Statement

amazon-vision-statement-mission-statement (1)
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Customer Obsession

customer-obsession
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!

Amazon Revenues

amazon-revenue-model
Amazon has a business model with many moving parts. With the e-commerce platform which generated over $222 billion in 2021, followed by third-party stores services which generated over $103 billion, Amazon AWS, which generated over $62 billion, Amazon advertising which generated over $31 billion and Amazon Prime which also generated over $31 billion, and physical stores which generated over $17 billion.

Amazon Cash Conversion

cash-conversion-cycle-amazon

Working Backwards

working-backwards
The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

Amazon Flywheel

amazon-flywheel
The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

Jeff Bezos Day One

jeff-bezos-day-1
In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

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About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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