It\u2019s probably not what you expect.Josh in a Box (South Park)Have you ever wondered how the world\u2019s largest online retailer (AMZN), with a market cap of $1.5 trillion, makes the majority of its revenue?Its cloud services, digital advertising, physical products, subscriptions (Estimated whopping 126 Million Prime Members), retail, and web services.Amazon’s annual revenue for 2020 was $386.064B, a 37.62% increase from 2019.Amazon revenue for the quarter ending December 31, 2020, was $125.555B, a 43.59% increase year-over-year.Amazon Segment Breakdown FY 2020 by InvestopediaAs expected, Amazon\u2019s businesses continued to benefit tremendously from the pandemic. EPS grew 118% YOY, and Operating Cash Flow increased by 72%. Q1 2021 is expected to grow by 33\u201340%.AWS is Amazon\u2019s largest source of operating profits and is growing fast. AWS provides an \u201cInfrastructure platform in the cloud\u201d for hosting applications and websites. Currently, AMZN controls a third of the global cloud market, competing with Microsoft\u2019s Azure and Google Cloud.The North American division of the business generates more revenue, but the cloud services generate nearly 60% of the company\u2019s operating income.Third-Party Marketplace:Amazon’s third-party marketplace is where third-party sellers sell new or used products on a fixed-price online marketplace alongside Amazon\u2019s regular offerings. Using Amazon Marketplace, third-party sellers gain access to Amazon\u2019s customer base, and Amazon expands the offerings on its site without having to invest in additional inventory.Amazon charges its third-party merchants a referral fee for each sale which is a percentage of the sales price. Additionally, sellers using FBA must pay additional fees which include a pick, pack, and weight charge.\u201cThe Amazon seller is the most profitable customer to AMZN.\u201dWhile the consumers profit greatly from Amazon\u2019s low prices and added services, sellers pay the price. Estimated seller fees are 15%, fulfillment by Amazon is 10%, and Ads are 15%. Not a surprise, but 53% of every product\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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