HOW MUCH DOES AMAZON MAKE IN A YEAR?
In less than two decades, Amazon has risen from its humble beginnings as an online bookstore to one of the world’s largest companies in revenue. As far as money goes, Amazon has billions of dollars to play with.
In 2020, Amazon recorded annual net revenue of $386.06 billion, which was a 38% increase from the previous year.
Source: Statista, 2021
Of that $386.06 billion, Amazon reported $21.33 billion as its net income, recording a massive increase of 84% from the previous year.
Finding it hard to imagine just how much that money is? Let’s break down how much Amazon earns in different time units.
$386.06 billion in a year amounts to the following:
- $32.2 billion per month
- $7.4 billion per week
- $1.1 billion per day
- $44.1 million per hour
- $734,512.9 per minute
- $12,241.88 per second
How does Amazon Make Money?
Answering the question “how much does Amazon make in a year?” is incomplete without considering how Amazon makes its money. When you think of Amazon, online shopping comes to mind. Amazon is not only the world’s largest online retailer, it’s also the world’s leading online marketplace.
Amazon’s popularity stems from the wide selection of products available on its website. Virtually any product you can think of is sold on Amazon.com. Some of its products are bought from vendors and resold to customers, while others are offered by third-party sellers.
Although Amazon is more popular for its eCommerce operations, this conglomerate has diversified into subscription services, cloud computing services, and advertising sales.
Here’s a breakdown of Amazon’s revenue streams:
- Online Stores: Amazon offers diverse retail goods through its online platforms. Some of Amazon’s products include toys, games, apparel, baby products, clothing and accessories, jewelry, kitchen products, beauty products, health and personal care, sporting equipment, books, home & garden items, etc. In addition to physical items, Amazon also offers digital products for sale such as music, ebooks, videos, games, and software.
- Physical Stores: Amazon has expanded into the world of brick-and-mortar retail stores too. Amazon has a chain of physical bookstores (Amazon Go), convenience stores (Amazon Go), grocery stores (Amazon Fresh). Other physical stores include Amazon 4-Star and Amazon Pop-Up.
- Retail third-party seller services: Amazon allows third-party sellers to sell new or used goods on its Marketplace, for some fees. Amazon makes money from third-party sellers through commissions (referral fees), shipping and fulfillment fees, and other related services.
- Subscription services: Amazon earns monthly and annual fees from its wide range of subscription services, the most popular being Amazon Prime. Amazon Prime has over 200 million paying members, more than half of which are in the U.S (Source: Statista). In addition, Amazon also has Prime Video, Amazon Music, Subscribe and Save, Kindle Unlimited, Audible, etc.
- Amazon Web Services (AWS): Through AWS, Amazon offers cloud computing services to start-ups, companies, government agencies, and academic institutions through a pay-as-you-go model. AWS is one of Amazon’s fastest-growing business segments.
- Other: Amazon also earns money from other businesses, such as its advertising services and co-branded credit card agreements.
Unsurprisingly, online retail product sales contribute the majority of Amazon’s revenue. This is followed by retail third-party seller services, AWS, subscription services, and physical stores.
How Can I Get A Slice of The Pie?
Every year, Amazon generates billions of dollars from its diverse businesses and industries, and the amount drastically increases every year. The coronavirus pandemic contributed to Amazon’s success in 2020, as more people switched to online shopping. However, Amazon had already been on the rise, due to its constant innovation and customer-centric approach.
We’ve shared all these numbers for one reason only: to show you the massive power of Amazon and the many opportunities it presents. You, too, can make tons of money through Amazon. You shouldn’t just wonder, “How much does Amazon make in a yearly revenue?”. but you should explore ways to profit from Amazon.
Amazon’s eCommerce section is still its most profitable segment, and third-party sellers are a contributing factor, as they generate more than half of the sales on Amazon. So, if you want to leverage Amazon’s power, then you should be selling on Amazon.
There are different Amazon selling models you could consider:
- Private label: This model involves sourcing existing goods from manufacturers and selling them under your brand.
- Wholesale: This model involves buying branded goods in bulk at a discounted price, and reselling them on Amazon at a markup.
- Retail/online arbitrage: This model involves buying discounted goods from a brick-and-mortar retail outlet or online retail platform and reselling on Amazon.
- Dropshipping: This model involves selling goods on Amazon without holding inventory and outsourcing fulfillment to a dropship supplier.
The Best Amazon Seller Software to Use
Amazon is a top favorite among consumers because of the smooth shopping experience it provides. And do you know how Amazon provides that? By leveraging data.
If you decide to sell on Amazon, you also need to rely on data. Data about the most profitable products, price changes, high-performing keywords, etc. And the best Amazon seller software that helps you make data-driven decisions is Zonbase.
Zonbase is an all-in-one software tool for Amazon sellers that assists sellers with key processes such as product research, keyword research, listing optimization, and more.
Are you ready to start your Amazon seller journey with Zonbase? Sign up for a free trial here.