How Does Amazon Make Money?

Amazon has a diversified business model. Amazon’s primary revenue streams comprise its e-commerce platform, made of Amazon labeled products and Amazon third-party stores. In addition to that, Amazon makes money via third-party seller services (like fulfilled by Amazon), advertising on its platform, AWS cloud platform, and Prime membership.

Breaking down how Amazon makes money

Amazon‘s revenue streams comprise:

  • Amazon-branded products: those products are branded with Amazon label, and sold directly on its e-commerce platform. 
  • Amazon’s third-parties products: those are third-party stores hosted on Amazon Marketplace, which leverage Amazon distribution to amplify their products reach.
  • Amazon third-party seller services: seller services comprise additional services that Amazon offers to third-party sellers to store their products in Amazon’s inventory and get them fulfilled by Amazon. In that case, Amazon will follow the whole process on its marketplace and give back a royalty to the third-party seller.
  • Product advertising: Amazon is the most popular product search engine. On Amazon, you can find almost anything and Amazon enables third-party sellers to give more visibility to their products via performance-based advertising.
  • Amazon Prime: a subscription-based service providing a library of TV Series and movies and at the same time a free and faster delivery on some of the products.
  • Amazon AWS: that is the Amazon cloud platform, selling cloud space mostly on a cost-per-usage basis.

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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"