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.

data in billion dollars  Revenues
Amazon $10,1B
Facebook $55B
Google $116B
Bing (Microsoft) $7B

Amazon revenues, broken down by geography

data in billion dollars  Revenues per area
United States 160,146
Germany 19,881
United Kingdom 14,524
Japan 13,829
Rest of world 24,507

More resources about Amazon 

 Data Sources: 

  • Amazon Financial Statements for 2018
  • Amazon Shareholders’ Letter for 2018

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"

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