The Briefing
- While a majority of Amazon’s revenue comes from online sales, the company has several other business segments that generate billions of dollars in revenue
- The largest business segment following online sales is third-party selling services
How Amazon Makes Its Money
With a market cap of $1.7 trillion, Amazon is the most valuable retailer in the world. But the company has grown into more than just an online store.
Amazon is now the proud owner of multiple billion-dollar revenue streams—but what are these different business segments, and how much does each unit contribute to the company’s overall revenue mix?
Here’s a look at Amazon’s different business segments, and how much each contributed to the company’s total revenue in 2019 (which was a casual $281 billion):
| Business Segment | Percent of Revenue (2019) |
|---|---|
| Online stores | 50.4% |
| Third-party seller services | 19.2% |
| Amazon Web Services (AWS) | 12.5% |
| Subscription services | 6.9% |
| Physical stores | 6.1% |
| Other | 5.0% |
While online stores generated the highest amount of revenue at 50.4%, third-party seller services made up a significant portion as well, making up 19.2% of the total.
Third-party selling has seen significant growth over the years—in 2018, it accounted for 58% of Amazon’s gross merchandise sales, which is a vast increase compared to 2000, when it made up merely 3%.
Amazon Web Services (AWS) is the third most important revenue stream, contributing 12.5% to the overall mix. However, despite contributing a relatively small percentage to total revenue in 2019, AWS made up a large portion of Amazon’s operating income, making it the key to the company’s overall profitability.
» To learn more, read our full article on How Big Tech Makes Their Billions.
Where does this data come from?
Data was sourced from directly from Amazon’s 2019 SEC filing.
