Nowadays, most retailers are moving their businesses online, but no one does e-commerce quite like Amazon! The company began as a humble online bookstore, but is now one of the largest online retailers worldwide. Its dominance of the e-commerce sector is so impressive that according to One Click Retail, Amazon was responsible for about 44% of all online sales in the US last year. This represents about 4% of all retail sales across the country.
Among the top product groups for Amazon are consumer electronics, which account for about USD 8.5 billion in estimated total sales (+4% YoY), home and kitchen, worth around USD 5.5 billion (+20% YoY), publishing, at about USD 5 billion (+3% YoY), and sports and outdoors, registering sales of around USD 4 billion (+11% YoY).
In 2017, the company’s fastest-growing product categories were luxury beauty at about USD 400 million (+47% YoY), pantry items, coming in at around USD 500 million (+38% YoY), grocery items, racking up a total of around USD 1.5 billion (+33% YoY), and furniture items, worth about USD 1.5 billion (+33% YoY).
Of course, Jeff Bezos’ gigantic company now earns significant revenues from non-retail activities. Amazon Web Services (AWS), Amazon Prime subscriptions, and advertising are other large divisions with high gross profit margins and massive revenue growth.
According to research carried out by Consumer Intelligence Research Partners (CIRP), Amazon Prime subscribers tend to spend more, spending around USD 1,300 a year, compared to just USD 700 for non-Prime members.
Many international and local companies, as well as leading institutions, use AWS’ servers, and its contribution to Amazon’s total turnover is constantly increasing: in 2014, 5% of all company revenues came from AWS, rising to 7% in 2015 and 9% in 2016. Amazon is also growing its presence in the realm of connectivity, often known as the Internet of Things (IoT), with AWS IoT Core, a cloud platform allowing connected devices to interact in a simple and secure manner.
Last year, Amazon’s stock price gained about 47%, from USD 795.99 to USD 1,169.47. Morgan Stanley remains bullish on the company in 2018 because of “better profitability, strong revenue growth, and expansion to large, under-penetrated markets”.
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