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Is Amazon Profitable? Amazon Profitability 1994-2018
Amazon is a profitable company. Its operating income and net income passed $12.4 billion and $10 billion respectively in 2018. The operating income was driven primarily by Amazon AWS, contributing $7.29 billion. Amazon has been consistently profitable since 2015 when it posted 596 million in profits.
Amazon has a diversified businessmodel. 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.
As of 2018-2019, Amazon AWS is a major contributor to Amazon operating and net income. That is because AWS has different unit economics logic:
Amazon AWS follows a platform businessmodel, that gains traction by tapping into network effects. Born as an infrastructure built on top of Amazon‘s infrastructure, AWS has become a company offering cloud services to thousands of clients from the enterprise level, to startups. And its marketplace enables companies to connect to other service providers to build integrated solutions for their organizations.
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