How Amazon Makes Money

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How Amazon Makes Money

How Amazon Makes Money?

The largest online retailer in the world, Amazon.com Inc. (AMZN), has experienced tremendous growth in a variety of industries, including its core ecommerce operations, cloud services, and digital advertising. Additionally, it offers the Kindle e-reader, Fire TV, Alexa voice assistant, as well as movies and TV episodes via its Amazon Prime Video service.

Three business sectors make up Amazon's organization: North America, International, and AWS (Amazon Web Services). North America and International, the first two of these sectors, are breakdowns of Amazon's retail business by region. Retail sales in North America and the rest of the globe, subscriptions, and export sales for those regions all contribute to their revenue.

Retail may be further divided into online retailers, which account for the majority of sales, and physical stores. Company-wide, sales from digital shops were $66.1 billion in Q4 FY 2021, or roughly 48% of net sales, while sales from physical stores totaled $4.7 billion, or roughly 3% of net sales.

With $82.4 billion in net sales in Q4 FY 2021, Amazon's North America division dominated the company's net sales. That represents nearly 60% of the company's quarterly net revenues and is an increase of 9.3% from the prior quarter. The segment's oating loss for the quarter was $206 million, a considerable decline from the $2.9 billion in oating profits for the same period last year.

In Amazon's international sector, consumer product retail and subscriptions for retailers with an international focus are combined. Additionally, export sales from those retailers are included; however, stores with a North American concentration are excluded.

A dramatic decline from the segment's Q4 FY 2021 oating income of $363 million was reported as an oating loss of $1.6 billion. About 27% of total net sales, or $37.3 billion, came from the international segment, which saw net sales decline by over 1.0% YoY.

Launched in 2006, Amazon Web Services (AWS) offers content delivery and information storage services to corporations, governmental organizations, and academic institutions. According to Amazon, AWS offers a infrastructure platform in the cloud for a number of solutions, including hosting websites and apps, offering business information technology (IT), and delivering content.

Because of its size and prominence in the computing industry, AWS has significantly surpassed its rivals. According to estimates from unaffiliated analysts, as of the first quarter of 2021, AWS held 32.4% of the market, followed by Azure (20%) and Google Cloud (9%).

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