Amazon vs. Walmart

Amazon and Walmart run both retail business models. In contrast, Amazon started as a digital player, then expanded into the physical world, and Walmart instead successfully launched its e-commerce platform over the years.

In 2022, Amazon closed its divide in terms of total revenue, as it generated over $513 billion in revenue, compared to over $572 billion in revenue from Walmart.

While Amazon and Walmart are direct competitors in retail and now also e-commerce, at the core, the companies are pretty similar (both target variety and convenience, while Amazon obsesses over customer experience); in reality, Amazon is a company with many moving parts.

Indeed, by 2022, Amazon had various moving parts, such as advertising, and AWS.

Amazon generated over half a trillion dollars in revenue in 2022, of which $220 billion from online stores, over $117 billion from third-party seller services, $80 billion from AWS, almost $38 billion from advertising, over $35 billion from subscription services, almost $19 billion in physical stores, and over $4 billion from other sources.

AWS (cloud business), in particular, is a key element of Amazon’s business model today and also what contributes most to its profitability.

Amazon is subdivided into three operating profit segments: North America, International, and AWS. Amazon AWS is the most profitable segment, with almost $23 billion in operating profit in 2022. While Both the North American and International segments run at negative operating losses, with $2 billion and $7.74 billion in operating losses, respectively, in 2022.

Walmart (also building a successful e-commerce operation) has remained focused on its core business.

Walmart generated over $572 billion in revenue in 2022 and over $13.6 billion in net profits in the same year. Compared to over $559 billion in revenue in 2021 and over $13.5 billion in net profits.
Business Model ElementAmazonWalmartSimilaritiesDifferencesCompetitive Advantage
Customer SegmentsOnline shoppers, cloud computing clients, e-book readersIn-store shoppers, e-commerce customers, grocery shoppersBoth target a wide range of customer segments, including online shoppers. Amazon has a cloud computing division. Walmart has a strong presence in physical retail and grocery.Amazon’s significant focus on e-commerce and cloud computing. Walmart’s extensive network of physical stores and emphasis on traditional retail and grocery.E-commerce Dominance (Amazon), Extensive Physical Retail Presence (Walmart).
Value PropositionConvenience, vast product selection, Prime membership benefitsLow prices, one-stop shopping, physical store presenceBoth emphasize convenience and value. Amazon offers a vast product selection and Prime membership benefits. Walmart’s value proposition centers around low prices and one-stop shopping.Amazon’s online convenience and vast product selection. Walmart’s focus on affordability and a significant physical store presence.E-commerce Convenience (Amazon), Everyday Low Prices (Walmart).
ChannelsOnline platform, third-party sellers, Prime membershipPhysical stores, e-commerce website, online grocery orderingBoth use online platforms for sales. Amazon allows third-party sellers on its platform. Walmart operates physical stores and has an e-commerce website.Amazon’s exclusive online presence and third-party seller platform. Walmart’s extensive network of physical stores and its expansion into online grocery ordering.Extensive Online Presence (Amazon), Physical Retail Footprint (Walmart).
Customer RelationshipsDigital interactions, customer reviews, Prime membership benefitsIn-store interactions, loyalty programs, customer serviceBoth maintain customer relationships through digital interactions. Amazon relies on customer reviews and Prime membership benefits. Walmart fosters in-store interactions, loyalty programs, and customer service.Amazon’s focus on digital customer interactions and reliance on Prime membership. Walmart’s emphasis on in-store relationships and traditional customer service.Digital Engagement (Amazon), In-Store Relationships (Walmart).
Key ActivitiesE-commerce operations, cloud computing, content creationRetail operations, supply chain management, private label brandsBoth engage in e-commerce operations. Amazon has a cloud computing division and content creation (e.g., Amazon Studios). Walmart focuses on retail operations, supply chain management, and private label brands.Amazon’s diversification into cloud computing and content creation. Walmart’s core focus on traditional retail and supply chain management.Cloud Computing and Content Creation (Amazon), Traditional Retail Expertise (Walmart).
Key ResourcesE-commerce platform, data centers, content librariesPhysical stores, supply chain infrastructure, private label brandsBoth rely on e-commerce platforms. Amazon has data centers and content libraries. Walmart’s key resources include physical stores, supply chain infrastructure, and private label brands.Amazon’s emphasis on digital resources, data centers, and content libraries. Walmart’s reliance on physical retail assets, extensive supply chain, and private label brands.Digital Resources (Amazon), Physical Retail Assets (Walmart).
Key PartnershipsThird-party sellers, content creators, delivery servicesSuppliers, technology partners, delivery and logistics providersBoth collaborate with third-party sellers and delivery services. Amazon partners with content creators. Walmart collaborates with suppliers, technology partners, and logistics providers.Amazon’s partnerships with content creators and its broader range of technology collaborations. Walmart’s focus on supplier relationships and logistics partnerships.Content Creation Partnerships (Amazon), Strong Supplier Relationships (Walmart).
Revenue StreamsProduct sales, subscription services, advertisingProduct sales, in-store services, advertisingBoth generate revenue through product sales and advertising. Amazon has subscription services (e.g., Prime). Walmart offers in-store services in addition to product sales.Amazon’s diverse revenue streams, including subscription services and advertising. Walmart’s primary revenue source is product sales, both in-store and online.Subscription Services (Amazon), In-Store Service Offerings (Walmart).
Cost StructureFulfillment and shipping costs, technology development expensesSupply chain and operational costs, employee wagesBoth manage costs related to fulfillment and technology. Amazon incurs significant costs for fulfillment and technology development. Walmart focuses on supply chain and operational costs.Amazon’s higher technology development expenses and investment in fulfillment and shipping. Walmart’s cost structure centered around supply chain efficiency and employee wages.Technology Investment (Amazon), Supply Chain Efficiency (Walmart).

Connected to Amazon Business Model

Amazon Business Model

Amazon has a diversified business model. In 2022 Amazon posted over $514 billion in revenues, while it posted a net loss of over $2.7 billion. Online stores contributed almost 43% of Amazon revenues. The remaining was generated by Third-party Seller Services, and Physical Stores. While  Amazon AWS, Subscription Services, and Advertising revenues play a significant role within Amazon as fast-growing segments.

Amazon Revenue By Country

Amazon Revenue By Country
In 2022, most of Amazon’s revenue came from the US, with over $356 billion in revenue, followed by Germany with $33.6 billion, the UK with $30 billion, Japan with $24.4 billion, and the rest of the world generated almost $70 billion in net sales.

Amazon Cost Structure

Both the North American and International segment of Amazon are running at negative margins. Indeed, in 2022, for the North American segments, of almost $316 billion in revenue, Amazon spent almost $319 billion in operating costs to run it, thus it generated $2 billion in operating losses in 2022. For its International segment, of $118 billion in revenue, Amazon spent almost $126 billion to operate it. Thus, it reported a $7.7 billion operating loss. While for AWS, with $80 billion in revenue, Amazon spent $57 billion to operate it, thus generating almost $23 billion in operating income. The high operating costs are primarily due to the high cost of running Amazon’s inventory and fulfillment infrastructure behind its e-commerce operations. Indeed, Amazon is as much as a physical player as a digital one.

Is Amazon Profitable Without AWS?

Amazon was not profitable once AWS was removed in 2022. In fact, Amazon, without AWS generated $10.6 billion in operating losses. While Amazon, without AWS, generated $12.2. billion operating income.

Amazon Profit Breakdown

Amazon is subdivided into three operating profit segments: North America, International, and AWS. Amazon AWS is the most profitable segment, with almost $23 billion in operating profit in 2022. While Both the North American and International segments run at negative operating losses, with $2 billion and $7.74 billion in operating losses, respectively, in 2022.

Amazon Revenue Breakdown


Amazon Revenue Per Employee


Amazon vs. Walmart


eBay vs. Amazon

In 2021, Amazon generated almost $470 billion in revenue, vs. eBay’s over $10.4 billion. In comparison, looking at revenues, Amazon was 45x times larger than eBay.

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

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 has a business model with many moving parts. The e-commerce platform generated $220 billion in 2022, followed by third-party stores services which generated over $117 billion; Amazon AWS, which generated over $80 billion; Amazon advertising which generated almost $38 billion and Amazon Prime, which generated over $35 billion, and physical stores which generated almost $19 billion.

Amazon Cash Conversion


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

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

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.”

Walmart Business Model

With over $572 billion in net sales in 2022, Walmart operates a differentiated Omni business model with three primary units comprising Walmart U.S., Walmart International, and Sam’s Club (a membership-only warehouse club), together with Walmart+. This subscription service includes unlimited free shipping, unlimited delivery from its stores, and discounts launched in 2021.

Walmart Revenue vs. Profit

Walmart generated over $572 billion in revenue in 2022 and over $13.6 billion in net profits in the same year. Compared to over $559 billion in revenue in 2021 and over $13.5 billion in net profits.

Walmart Revenue

Walmart generated over $572 billion in revenues in 2022, compared to over $559 billion in 2021.

Walmart Customers

Walmart had 230 million global customers in 2022, compared to 240 million customers in 2021 and 265 million customers in 2019.

Walmart Stores

In 2022, Walmart had 10,500 employees globally, compared to 11,400 employees globally, in 2021.

Walmart Employees

Walmart had 2.3 million associates globally in 2022, the same number in 2021. While in 2020, Walmart had 2.2 million associates globally.

Walmart Mission Statement

Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Walmart SWOT Analysis

From humble beginnings just over 50 years ago, Walmart has become the world’s largest retail company. A single small discount store in Arkansas has now expanded to over 11,000 stores in 28 countries. Some reports suggest that the company makes $1.8 million of profit every hour.

Read Also: Walmart Business Model, Walmart SWOT Analysis, Walmart Mission Statement, Costco Business Model.

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