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Amazon’s Money Secret Make Everyone Pay You

When Amazon announced its first quarter results in late April, the number was impressive. Net sales grew 41% year-on-year to $ 108.5 billion, with net income of $ 4.0 billion in 2020 to $ 8.9 billion in 2021 and $ 2.5 billion to $ 8.1 billion.

It does not seem surprising in view of the epidemic. But many still do not understand the company and what it does. Talk to people and you will find more people who think that Amazon is living and dying from the benefits of selling its product. Anthony Sukumba, managing director of the equity division at Loop Capital Markets, said the company was essentially losing money. The diagrams below show the actual image using S&P capital data.

Amazon’s actual business is completely different. The company makes big money in providing business services to others that still need to be developed for its own use. Looking at the actual model of the “retail to retail” operation, as it were, reveals the secret to success: sell everything.

Where did Amazon money come from?

Amazon was the first bubble to burst as Amazon became completely dependent on its retail sector. Total online product sales were $ 52.9 billion. But this is what Amazon does together and is a group of third-party vendors that use the company’s market. According to Amazon’s own data, their own unit sales worldwide are in the minority overall.

For a profit, Sukumba said, “If [they] lose any part of their business, it could be a first-rate sale.” “It’s the least profitable part of their sales. In terms of the hierarchy of revenue limitations, it’s primarily advertising, AWS [Amazon’s web-based IT services] number two, number three part third sales and direct number sales. ”

Sukumba, an online advertising service, puts its revenue behind Google and Facebook.

“The media business generates more than $ 20 billion per year in revenue on Amazon,” said Rob McGovern, founder of CarrierBuilder.com and now CEO of Precision Target, which describes the taste in retail purchases. “Which hammer should they take? Easiest, best bait and mortar hammers. Amazon lists the Stanley and Craftsman hammers captured by the Google SEO method, and the ring money when people visit Amazon’s hammer page.” Records. ”

For a profit, Sukumba said, “If [they] lose any part of their business, it could be a first-rate sale.” “It’s the least profitable part of their sales. In terms of the hierarchy of revenue limitations, it’s primarily advertising, AWS [Amazon’s web-based IT services] number two, number three part third sales and direct number sales. ”

Sukumba, an online advertising service, puts its revenue behind Google and Facebook.

“The media business generates more than $ 20 billion per year in revenue on Amazon,” said Rob McGovern, founder of CarrierBuilder.com and now CEO of Precision Target, which describes the taste in retail purchases. “Which hammer should they take? Easiest, best bait and mortar hammers. Amazon lists the Stanley and Craftsman hammers captured by the Google SEO method, and the ring money when people visit Amazon’s hammer page.” Records. ”

In terms of growth, here are some specific numbers of net sales by category. Online store sales (remember, including third-party sales through its system) reached 41%, excluding forex effects. But services to increase third-party sales? Third-party sales grew 64%, claiming to grow faster than Amazon. Advertising service grew 77%, primarily for retailers.

It pays to do business

Amazon’s financial talent is similar to Google’s, explained Benjamin Black in 2012, who worked at Amazon under Chris Bingham, who helped develop the AWS idea. “Google makes money from advertisements, but they are an infrastructure company, like Amazon sells books, but they are an infrastructure company,” he wrote. “These are infrastructure companies that build their infrastructure and expertise for everyone’s consumption.”

The nature of Amazon’s business infrastructure makes it difficult for many other companies to compete because they do not operate equally. A retailer, big or small, makes money by selling goods at a reasonable price, at a low cost, to make a profit.

However, Amazon has several revenue taxes. Pay it to run advertisements for both vendors selling the product and third-party vendors. There is a major membership fee that gives people access to digital goods such as music and videos, as well as “free” shipping that members pay either way. Amazon sells all types of services such as warehousing and shipping to third-party vendors.

The result was a large river of diversified revenue that drove Amazon to the black and was far ahead of its rivals.

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