How Amazon Earns And Uses Its Billions Profits, Investments, Acquisitions

How Amazon Earns

Do you even know that Amazon is the unchallenged global leader of e-commerce in the world and Earth’s most customer-centric company? Well, all thanks to its dedication to customers’ large choice of products and services, not excluding global presence in their activities, Amazon earns billions of dollars and it intends to keep on expanding its domination on online shopping and beyond.

Amazon is an American multinational technology company that focuses on e-commerce. it was founded in Bellevue Washington, in the United State in 1994. The key to its success has really been its persistent struggle to become ‘Earth’s most customer-centric company.

Here let’s look at how amazon earns its money:

Amazon as known is not just a retail company as it is well known by everyone. Since the launch of Amazon Web Services- AWS IN 2004 amazon is now engaged in the broader technology sector and has now grown into the world’s leader in on-demand cloud computing and contributes hugely to companies’ revenues and profits.

This makes them separate their activities into three segments which include North America, International, and Amazon Web Service (AWS). These three segments have their various duties and contribute to the development of Amazon.

As for the North American segment, this segment has to do with export sales from online stores and as well, it consists of the amount earned from retail sales of customer products which includes the third-party sellers, and the subscriptions through this segment focus on only online stores and physical stores.

Also with the International Segment, they consist and deal mostly in the internationally-focused online stores as well. They include export sales from the online stores to customers in the U.S, Canada, and Mexico but have nothing to do with North America Focused online stores.

And the AWS segment really has no involvement in-store products as it only deals with just the amounts earned from global sales of compute, storage, database, and every other service offerings for startups which includes government agencies, academic institutions, and enterprises.

Looking back in 2019, the retail operation, online and the physical stores in North America brings a lot to the company as they brought over 7billion dollars and this is actually kind of below the ones of 2018 and 2017 even though they still generate an operating loss but has no much damage on the company.

Amazon is making huge monies in the year however makes good use of its money by investing more in technology and content to increase. Its aim is to hire more tech-focused employees, invest in technology content in other to support its geographic expansion due to its cross-functionality growth of systems and operations in AWS and the technology infrastructure.

Aside from all their numerous achievement, Amazon has also acquired lots of goodies which makes them have a bright future. Amazon actually has been long consolidating its presence in e-commerce and more traditional, a physical retail sector which is really different from their previous diverse acquisition.

Back in 2019, Amazon actually acquired companies for their customer-serving technologies, and this company is worth 315 million dollars even though smaller acquisitions like this are common for them since they spend a few tens or hundreds of millions every year.

Moving to 2018, they moved to purchase larger companies in other to expand their own offer of products and services. Amazon bought Ring for about 839 million dollars, a company that produces Wi-Fi-enabled video doorbells, and they are now integrated into the electronic equipment portfolio which is sold through Amazon’s stores and they provide a diversified range of smart doorbells, Visio phones, and cameras.

Amazon actually doesn’t base on only that, as their acquisitions also include Souq Group which is also an e-commerce company, and re-banded it as which takes a foothold in the United Arab Emirates but in Saudi Arabia and Egypt, it still remains

Amazon also expanded their purchase to Whole Foods Market which has to do with multinational chains and this was actually their largest acquisition so far. It includes over 500 supermarkets in the United State, 7 in the United Kingdom.

They are actually kept as a separate brand and only deal with organic food products without hydrogenated fats and artificial colors flavors and preservative distributing. This actually gave Amazon a strong foothold in traditional and physical retail.

Above all, amazon in 2018 launched another project known as Project Kuiper whose mission is to launch a constellation of thousands of satellites to provide a connection to people who still don’t have much access to the internet. This actually is ambitious and would be interesting to follow up.

These billions, investments, and acquisitions of Amazon make them the first and unbeatable e-commerce company. With these, one could see that the future of the company is bright and have a lot to offer its customers in the year to come in the technology sector, market sectors, and even every sector of human consumptions.

Let’s wait on Amazon as they keep satisfying the need of their consumers and keep on bringing us and exposing us more to the world of technology.

What do you think?

Written by Gustavo Franko

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