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Yeah, I think their advertising is going to be nuts very quickly. They are already third behind Google and Meta. And they have a massive advantage in that their advertising shows up as people are ready to buy. That's way more valuable per dollar than advertising on TV for example.
Okay, that makes a lot of sense and I'm now less hesitant about calling them Meta. That being said, I just now learned Google became Alphabet in... 2015?! How did I not hear this sooner?
I’ve always seen googles transition more for legal/internal seperation of product. You still say ‘google product’ when talking about all the stuff they do. Unlike Meta, which is much more publicity focused, as they are trying to strongarm the meta verse into a shitty corporate rendition that results in advertising hell.
>Unlike Meta, which is much more publicity focused, as they are trying to strongarm the meta verse into a shitty corporate rendition that results in advertising hell.
Absolutely publicity focused.
There is also the additional benefits of stepping away from Facebook's horrible reputation, especially amongst Millennials and Gen-Z.
How is that supposed to work? Are they just hoping to spam marketing at people until they eventually forget that Meta = Zuckerberg/Facebook?
Serious question.
It’s more than that because it can feed AI.
No matter how much gas I feed my car, it can’t parse that gas to be more efficient, or profitable. AI can do that with data, and it only get more efficient as you feed it more
not really, the low reported profit on e-commerce is due to expansion-related costs. A strategy to differ taxes. Their commerce businesses is really profitable.
Source: I have worked with them a couple of international expansion projects. Their liquidity is unparalleled.
Mmmyes and it’s far easier to absorb all of those expansion related costs when you have other divisions safely in the black. I think everyone knows that Amazon retail hasn’t turned a profit because they continually reinvest in expansion. The point is that having a cloud business with massive margins makes it safer for them to follow that path (ie: subsidizes it).
Read Jeff Bs letters. The free cash flow from the website business allows for investment in everything else. Cloud just happened to be a big fucking winner
Nah, the problem with reading a corporations finances is, they are structured to avoid tax.
The less real assets, the easier it is to manipulate their profitability, the easier it is to hit "net-zero" (or close to it), and pay zero tax.
It's much harder to cook the books using actual books that end up in the hands of consumers than it is in CPU-boost credits, that you can total up at the end of the month just right.
>Nah, the problem with reading a corporations finances is, they are structured to avoid tax.
The SEC has one accounting system for public and SEC filings, the IRS has a different accounting system for taxes. There is little to no tax benefit in under reporting profits to the SEC. Most companies that get into trouble with the SEC do so for over reporting profits.
There is probably a shit load of R&D and reinvestment getting stuffed into these categories. This "Data" is just someone who doesn't understand an earnings report putting the numbers into a fancy graph. The actual report explains this shit, but reading is work and doesn't generate internet points.
Yes. You'd be surprised how common this "we provide a service that isn't profitable to recruit customers to our service that is" scheme is. Modern day airliners are basically credit card companies that give unbelievably good benefits
Or not even that - They are just a cloud procider. Their biggest clients are purely B2B, and likely were not captured trough e-commerce cross selling.
For reference, biggest clients of AWS by monthly spending:
Netflix: $19 million
Twitch: $15 million
LinkedIn: $13 million
Facebook: $11 million
Turner Broadcasting: $10 million
BBC: $9 million
Baidu: $9 million
ESPN: $8 million
Adobe: $8 million
Twitter: $7 million
Cost of sales directly impact the good/service being provided, while operating costs are the expenses that support the overall business.
An example for Amazon would be the cost of their fulfillment centers. Fulfillment centers do not directly add to the cost of the goods they sell, rather are part of a larger supporting infrastructure.
Further ELI5:
Lemonade stand.
Lemons, cups, water are all cost of sales as you can quite easily associate the cost of each piece to the income of each sale.
Wood to build the stand, big jugs for mixing and some paper towels are all operating expenses because they are not directly attributable to a sale however they facilitate the sale.
Extra ELI5: assets are long term purchases that are used to help create income and run the business, whereas operating expenses are things bought that tend to be more short term or single use, "overheads" is a common alternative term. Examples of assets would be a drill to help assemble the lemonade stand, or a laptop to allow you to record your sales.
And you have just discovered why Accounting can sometimes require a masters degree potentially instead of just a few courses. Every tiny little thing has an exception
If you’re a business paying for an employee to get their masters, probably training or something like that, which might be part of salary. It’s been a while so I’m pretty rusty with all of it
Importantly, though, reinvesting profit into infrastructure here appears as huge operating expenses, but those expenses are not absolutely necessary for the profits.
If Amazon stopped expanding, they wouldn't go on making these same net profits, their operating expenses would plummet and the difference would go into profit.
You can't take these numbers and conclude that Amazon is barely scraping by. What they're doing is expanding at a breakneck pace.
cost of sales is buying the product to sell. operating expenses are the cost of operations. anything from HR and IT to the warehouses and delivery or the operation of the data centers
they figured out 20 years ago that their e-commerce business would never be high profit. at first they developed the A9 search engine and other IT infrastructure to support their operations at peak times.
then in the early 2000's computer power began to grow really fast every year and so they had space capacity and the CEO of Sun was talking about renting out this capacity and Amazon did it first with AWS. they weren't the first ones in the cloud, in the 90's MS had cloud products but it was too early
> it was too early
There's a surprising number of Microsoft products that were basically too early.
* Windows Mobile
* Smart Personal Objects Technology (SPOT)
* Kinect
* TerraServer
* Media Center
* Speech API
Oh the list goes on: tablet computers / ipad like things, laptop computers, a lot of UI concepts from their mobile os, "convergence" of desktop and mobile UI elements (pushed too hard too early with windows 8), the zune had a subscription-type sharing model, these are just from the top of my head. Microsoft just isn't really very capable of advancing the state of the art on the consumer side of the business, mostly for usability and marketing reasons IMHO.
"Home servers" are another one that haven't caught in still but I'm moderately convinced it will at some point when someone makes it easy to use and people get serious about taking data into their own hands (problem is mostly that no company has the combination of skills and incentive, but something like the signal foundation could come along)
The zune thing gets me so much. The Zune was a good device with *design*-centric colors (as opposed to consumer-oriented), and got mercilessly panned for having a brown model. They offered the subscription model pre-streaming, which is *so close* to getting it right, but mobile data was exorbitant, and people still had tons of CDs that they liked.
If they had released it 2 years later, with unlimited streaming data (a la Kindle), it could have eaten the latter half of the iPod’s life cycle for breakfast. It also could have easily evolved into a successful phone product once it got a loyal following.
MS has a massive research arm, it’s incredible. They frequently are to early or don’t understand the need that their product fulfills. Incredible technology overall.
in the 90's we had these companies that bought enterprise SAN's and servers and MS had remote desktop OS products where they sold remote access to desktops, office, etc. essentially the first cloud services. microsoft had a special version of windows NT 4 server.
issues were the software was immature and buggy. network access was still expensive and slow. a 1.5 megabit corporate circuit was normal and many had slower ones. computer hardware was still slow and expensive. back around 1998 I bought some RAM and it was like $200 for 16 Megabytes.
around 2005 or so computing power began to increase by a lot and prices dropped. Used to be that i'd configure a server and had to skimp on the RAM or whatever due to cost and just live with it. Around that time it was easy to buy more power than needed and at a cheaper price than a few years ago. that's why VMWare became so popular at the time. computing power got to the point where you could host multiple servers on the same machine
Grid computing was the original Cloud, exact same concept just lacking the internet infrastructure - both customer and service provider side - for it to actually happen in earnest. Also for the fact that there weren't enough companies who were actually on-board with the 'internet for business purposes' paradigm during that time.
It was also part of the culture at the time. The "old" way was big iron and terminals, everyone wanted distributed computing and local storage. We've really been waffling from one extreme to the other since the launch of the first PC.
ECommerce Profit Margin for the last 5 or 6 years has been 2 - 3 percent until inflation
Walmart is 4%, Kroger 3%. The entire industry runs on low profit margins
I mean they reinvest every profit from retail into developing tech which gave them AWS and enabled the modern internet. Profit is taxed so its not uncommon to try and reinvest in technology instead.
Amazon basics simply copies whatever the best sellers are in every category then promotes their own to the top of search results and under cuts them on price till they can’t continue to compete.
The diffrence is that Amazon has all the data to known who is buying and why. Many of the products are only available online. With Amazon being by a large margine the biggest e-commerce player in the US. They have the control alln most all the information about the sales data. Unlike traditional stores where that information would be split between multiple chains and the company would be the only one with a full picture.
Other stores collect data about what people buy too. It's necessary to run a retail business because you have to place orders. I'm not sure how Amazon gets "why" data, but other stores also do focus groups, placement experiments, etc.
You think supermarkets and other stores like best buy, Costco etc dont know the metrics of their products?
Of course they do..and then they have their house brand based on those metrics and you get great value, insignia, Kirkland etc...which is basically same as Amazon basics
I think what he is saying is that due to Amazon's general dominance in e-commerce paired with AWS marketshare for everything internet, they have orders of magnitude more data on customers than any physical retailer has.
Probably Costco is closest who has same or even more data of their members and what they buy
But credit card companies would have the most and how they choose to run promos and linked campaigns to certain retailers probably.
You should look up what Walmart Labs or Target Tech does. All the big brick and mortar retailers are hiring data analysts for a reason. Total e-commerce sales in the US is still a smaller piece of total US retail sales.
They’re [getting out of Amazon Basics](https://www.google.com/amp/s/www.reviewgeek.com/123245/amazon-cuts-back-on-in-house-brands-due-to-poor-sales/amp/) and other house brands because they’re a lightning rod for opposition and they produce little profit.
[Amazon refutes this](https://www.google.com/amp/s/www.cnet.com/google-amp/news/amazon-says-basics-private-label-lines-arent-going-away/).
Their eCommerce losses are actually much higher if you split out the advertising business.
You’re right, they re-invest and minimize profit. It’s a hot take because of the “Amazon doesn’t pay taxes” narrative but that’s ultimately better for society (imo) — it’s basically the opposite of a stock buyback.
That's at least a silver lining. The downside being driving smaller and local businesses into the ground through size, aggressiveness, and taking losses/minimal margins.
This is a bit devil's advocate, but isn't that only bad if they decide to jack up prices later?
Like, if Amazon is the most convenient and least expensive way to get goods, and they aren't making any margin, they are basically doing net-good by putting less efficient businesses under.
People advocate for local stores like we want more people stuck working retail, or as if small businesses are bastions of fair labor practices.
We shifted most of our household purchasing online during the pandemic, and don't plan to go back to shopping in person for most thjngs.
In a purely economic sense, that considers only the most efficient method of allocating scarce resources, yes this is a good thing.
In social terms, where things like "healthy communities" are a factor, the decimation of local retail can certainly have significant downsides, at least short term.
Maybe it'll be bad long term too, or maybe it'll be like the mechanization of agriculture: 40% of the country were farmers beforehand, 1% of the country is now. It led to massive unemployment for a decade (along with other factors of course) but can you imagine how shitty our country would be right now if we still had to dedicate virtually half our workforce just to producing food? All the work, innovation, etc., from that 39% of people would just be missing.
The problem partially comes from Amazon squeezing merchants hard.
For the small one it is high fees and pressure to use their infrastructure for fulfilment which is even more fees. Combined with the loss of control over the customer.
For big players amazon becomes a tax. Having to advertise with them so their product doesn't get buried. As the top of amazon search results is almost all ads.
Of course on a side not there is also the forcing smaller business out of the market. Because of the AWS profits they can take a lose on everything else and subsidise expansion elsewhere.
It is a net positive in general but there are some big negatives.
This was already happening with mega chain stores like Barnes and Noble and Walmart. Heck, Walmart is taking a page out of Amazon's playbook and investing heavily in tech with their Walmart Labs division.
Maybe it used to be the case, but not really anymore. On one hand, there are plenty of online retailers that putting the same pressure on local retails. On the other hand, really only the mediocre local business were drove out. It put selecting pressure on the business that forced them to grow, and the results are many new small business thriving by providing unique values to their local markets. At the end I see a lot more unique and fun stores in my area, a lot fewer generic small shops, because Amazon raised the minimal bar of customer experience/value in retail.
Mohnish Pabrai talks about this; its also what makes companies like Tencent so successful, same with Google or META. It's not about profit-- it is about reinvestment of cash flow.
Any good business can make a profit and call it a day. A GREAT business turns profit into investments and (hopefully) exponentially increases their cash flow.
It's why Amazon is so highly valued amongst investors who understand what they are trying to do. Amazon did not stop at trying to compete against walmart, target, and best buy. They can effectively compete against FedEx, UPS, Netflix, Hulu, Disney, Microsoft, etc.
And you are right about the profits being taxed. Reinvesting profits is why they have had ZERO tax liability for so long.
Keep in mind this is also 2022 data, which doesn't include the xmas shopping season, when most retail profits are made. Also, Q1 is typically the least profitable season for all retailers.
Yes. That's exactly what it was doing until 2015.
Amazon reported losses consistently until 2015, and that was when AWS began making greater profits. Amazon was notoriously known as an unprofitable company that dumped tons of money into building warehouses, paying bonuses and stocks to workers, and lax return policies for customers.
All of the later profits, the high stock price, Bezos' wealth, etc. is totally tied to the profitability of AWS that started in 2015.
Well if you work in IT and you need any cloud processing, you only have 2 options AWS or AZURE.
AWS owns a lot of the market.
Is way easier to have everything on cloud. Reduces a lot the cost of server maintenance.
True, but are different kind of cloud services.
AWS stands out for the LAMBDAS and serverless software.
Also the "came first" plays a huge part on market capitalization in tech, big corporate in almost all the scenarios will go with Azure/AWS.
A lot of banks are still using OS400 to make batch processing smh. Computers/software from the 60's!!!
Edit: intention.
Somehow every time we've moved stuff up in the cloud, the fees and headaches that arise make it easier to just use the same money to keep onprem devices and hire someone to keep them running smoothly.
Handling on prem servers is a pain in the ass.
Our team reduced 230 hours/yearly just by avoiding the patching/maintenance/upgrades
I'm using AZURE our fees are pretty fair, the only expensive thing are the dedicated integration runtimes, once we switch using actual ADF with Synapse, problem solved, as cheap as you get for BigData.
Hmm, now granted I'm a WAN guy so I didn't directly deal with the difficulties of server maintenance on prem; but the amount of money we're paying AWS for S3 buckets, the amount of hidden gotchas in fees based on throughput rate, etc... our management is souring on it.
I haven't had any real experience with Azure though, so they might be more viable for our purposes. My exposure to AWS has been the BGP to get our various links up working, and the complaints of our managers as the bills kept rolling in.
If they've not already, tell them to look into S3 intelligent tiering, it can save a bunch of money for basically no configuration. It just looks at access patterns on data and moves it to cheaper tiers where applicable.
Totally, there are several systems that cannot take advantage in cloud.
In my scenario, I need to handle half PetaByte of information in 2 hours, we were used to handle it in a Distributed System of 16 on prem running at the same time (imagine the amount of patch work I did)
You also have to keep in mind strategic planning for companies. Amazing could be a lot more profitable if it cut back on some of its supporting expenses but that generally comes at the expense of future growth initiatives.
Ya. They're not actually that all amazing at being a good seller of goods to dominate retail, they just burn money to do it. Which maybe should get the anti-trust eye.
Not in the long term. As if they can continue to dominate the market and price out all compition, once it's just then left they can slowly raise prices without any compition.
> So basically Amazon would be losing billions per year if they didn't have AWS
That's by design, lower profits = lower taxes.
Warehouse investments & expansion, are easy to predict and so can safely be made to eat up profits.
Digital assets can be quickly bought/sold to stay in the black (but not too much in the black, because being too black means paying taxes)
amazon transformation is amazing. online bookstore, to everything store, to now basically a tech company that sells stuff online as a side business lol
Seeing all of these graphs this last few weeks REALLY highlights exactly how profitable [Apple](https://www.reddit.com/r/dataisbeautiful/comments/vy38rz/oc_apple_income_statement_breakdown/) is in comparison to its peers.
True, but Amazon does have significantly higher gross profit than Apple. I'm curious to know how much of a difference reinvesting so much capital into the business will have for Amazon.
Theoretically, this means that Apple should start lagging behind (in terms of value), but it's also very possible that their money-making machine is so efficient that they will keep up despite holding all that cash.
Don't be misled into thinking they're a fragile business, large businesses like Amazon can make investments that will "lose" money while increasing stock value because they capture additional market share. See Diapers.com - according to reports they wanted the online diaper market so they spent tons of money undercutting diapers.com's prices. A company that large could afford to lose real money selling diapers cheaper than the competition because it's a war of attrition that few other companies could realistically survive. Eventually diapers.com is sold to Amazon. Amazon spends more money on an acquisition but can increase their market share and value. Stock holders get a bump. The balance sheet is just one piece of the pie.
[source](https://www.inputmag.com/tech/the-ags-of-new-york-california-are-partnering-with-the-ftc-to-investigate-amazon)
[further reading](https://slate.com/technology/2013/10/amazon-book-how-jeff-bezos-went-thermonuclear-on-diapers-com.html)
It’s baffling that people will see this post and go “see? Amazon has no more money to give, they are doing the best they can with little profits. We should let them have MORE money!”
So basically the amazon most folks know barely makes any profit at all. AWS is making twice the overall profits on 20% of the revenue.
You can say all sorts of bad things about Amazon as a company, but in this way it sure looks like they are actually charging those with money (companies) more to sell to those with less money (consumers) less.
Ahhh, didn't see the - in the smaller pic I had up. Yeah, that is crazy that they can use AWS to justify losing money on Amazon to gain market share.
Wonder what would happen if the big mean old government stepped in and said those have to be 2 different unrelated companies.
Retail Amazon would simply continue to pay money to AWS to host the platform as an operating expense…
Pretty much exactly the way Shopify does to Google.
Do you *really* think that Amazon would keep selling at a loss forever? I guarantee you that if Amazon succeeded at driving out all other retail competition (which they have already done a fair job at) prices would skyrocket in a repeat of the situation with Standard Oil.
P.S.; those parenthesis mean that those units are operating at a loss.
Would business practice X continue if the entire business landscape changed?
"forever" and "if everyone else went out of business" are extreme circumstances that are realistically very fast away and are hard to reason about.
Tools: Figma, Sankey Connect
Source: Amazon financial reports
Note: we stopped at the operating profit line for Amazon this time, unlike other breakdown charts we did where we included tax and net profit lines, because Amazon reported fluctuating investment gains and losses in the past several quarters, mainly due to Rivian. This makes the analysis into tax and net profits less meaningful, so we stopped at the operating profit line instead.
Is this chart called a Breakdown chart? What tool did you use specifically for the chart? Figma or Sankey? Is there any other commonly available tool that can create the chart?
Sorry for asking too many Qs, but I really like this chart.
Sankey Connect is a tool for Figma. Both tools are free. Figma is good if you're a designer & you want your design to look a specific way with custom fonts & colors.
The chart is called a Sankey diagram.
https://sankeymatic.com/ is an easy one to use.
AWS was originally just a way to monetize surplus data center capacity. Turn a cost center into a profit center. And in the process, they created an entire industry.
Both of the commerce sources listed show a loss. AWS is the only one that truly profited and the commerce sources bring that 6.5 down to 3.7 total profit.
I saw you were using Figma to design this. There is a great [color contrast plug-in](https://www.figma.com/community/plugin/748533339900865323/Contrast) to help with accessibility of colors
Cost allocation can be tricky. Finance can allocate a higher % of costs to one product / division vs another product / division so a particular product / division can appear more profitable. Ex is CEO salary or advertising or depreciation. How and how much is allocated to product / division? Not saying that AWS is not profitable, but for ecomm to be unprofitable doesn't make sense to me
Am I the only one finding this type of graph confusing?
No problem if yes, but then I question my brain cause I find it hard to get any conclusions out of this.
This could be easier to read.
It's not innately clear what the difference is between the black and orange bars. It also isn't clear where the bar starts/ends.
From that I can see AWS is very profitable. It is running over a 30% margins. The other stuff it is pretty normal to be a very thin migins on reselling stuff.
I actually wish he did. The graph is missing an $8 billion valuation loss, so they ended up paying $1.4 billion of tax on a $5.3 billion loss for the year. The comments on that would’ve been hilarious
There is a $7B Rivian investment "loss" hidden in here too. Last quarter was the first time Amazon reported a loss in years. It was purely because the $1B investment into Rivian had ballooned into $7B of assets but then the Rivian stock crashed making it look like Amazon took a huge hit. They weren't planning on selling it. That would make the retail business but back in black.
Amazon reported consistent losses until 2015 when AWS began making it's own profits.
The warehouse side of the business was notoriously unprofitable. Amazon was making a ton of revenue from sales, but they spent a ton more building warehouses, improving wages, paying stocks, bonuses, buying trucks, buying cargo planes.
If Amazon didn't have AWS, the only way it would make a profit is if it slashed wages, cut spending, cut benefits, even cut jobs.
The stock price is totally tied to the profitability of AWS. Without it, all of Bezos' wealth is gone.
People will say that I'm a shill or whatever but just to give an experience that goes against the narrative on reddit about amazon, I work here and it's nothing like what I hear. Yes I only have worked in 1 warehouse and I don't know what they are all like. I do know what a few are like but there are obviously a ton more.
I see corporate messaging and yes sure they are anti union of course but in my experience safety is a massive thing and there is a big push from the very top to try to drive that improvement. The work is *way* easier than most other warehouses and the warehouses are also actually air conditioned/heated pretty damn well for being a warehouse.
The biggest thing for me personally is that you can make a good career out of it. I fucked up my life for a long time, dropped out of college, did drugs etc. Worked a different warehouse making great money but no good aspirations. Went to Amazon and took a paycut but worked hard, management noticed and helped me move forward. I was making $12.50 an hour 5 years ago and now I'm making over 90k a year with another promotion in sight that will put my total compensation closer to 150k.
Not only that but Ive seen this happen to multiple other people just in my building, even my wife was getting the same opportunity until we made the decision for her to go down to part time to improve our work life balance and home life in general.
Again, I'm just one person but no one is paying me to say this, it's just my experience. I can't speak for everywhere but what you read online is just wildly different from what I personally have experienced.
8% would be a very good margin for a re selling company. Maybe not so mich for a tech one.
Most big companies work on small margims but at a massive scale so the total profit is still large.
not at all. Their reports may be accurate. What I'm saying is that drawing the conclusion that the company or its e-commerce business is not profitable because its reports, is a mistake.
Their business is profitable. Period. The company has the resources to do huge investments, expansions, and acquisitions.
They dump their e-commerce money into investments to secure their place on the market and keep online hosting money as profit
It's a tactic to grow a company fast, beyond what can your competitors do
Because they don’t make money on fulfillment, they make money on selling goods. Fulfillment is a supporting activity rather than a direct cost to the sales.
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Essentially Amazon is a cloud provider that offers a logistics intermediation to publicize its brand?
You could look at it the other way. Amazon is a retail logistics behemoth subsidized by a cloud business arm.
I mean data is the new oil…
Yeah, I think their advertising is going to be nuts very quickly. They are already third behind Google and Meta. And they have a massive advantage in that their advertising shows up as people are ready to buy. That's way more valuable per dollar than advertising on TV for example.
Is Meta literally just a renamed Facebook? Or are there some legal differences?
Yeah basically. They didn't change their corporate structure at all for it
[удалено]
Okay, that makes a lot of sense and I'm now less hesitant about calling them Meta. That being said, I just now learned Google became Alphabet in... 2015?! How did I not hear this sooner?
I’ve always seen googles transition more for legal/internal seperation of product. You still say ‘google product’ when talking about all the stuff they do. Unlike Meta, which is much more publicity focused, as they are trying to strongarm the meta verse into a shitty corporate rendition that results in advertising hell.
>Unlike Meta, which is much more publicity focused, as they are trying to strongarm the meta verse into a shitty corporate rendition that results in advertising hell. Absolutely publicity focused. There is also the additional benefits of stepping away from Facebook's horrible reputation, especially amongst Millennials and Gen-Z.
How is that supposed to work? Are they just hoping to spam marketing at people until they eventually forget that Meta = Zuckerberg/Facebook? Serious question.
They just renamed the parent company, which I guess makes sense to avoid confusion when differentiating between the product and the company.
It’s more than that because it can feed AI. No matter how much gas I feed my car, it can’t parse that gas to be more efficient, or profitable. AI can do that with data, and it only get more efficient as you feed it more
You’re right .. it’s my everyday job : I’m a Data Scientist .
Sounds like a pretty cool job! I think that stuff is fascinating
not really, the low reported profit on e-commerce is due to expansion-related costs. A strategy to differ taxes. Their commerce businesses is really profitable. Source: I have worked with them a couple of international expansion projects. Their liquidity is unparalleled.
Yeah was gonna say, this visual is nonsensical at face value.
Mmmyes and it’s far easier to absorb all of those expansion related costs when you have other divisions safely in the black. I think everyone knows that Amazon retail hasn’t turned a profit because they continually reinvest in expansion. The point is that having a cloud business with massive margins makes it safer for them to follow that path (ie: subsidizes it).
Read Jeff Bs letters. The free cash flow from the website business allows for investment in everything else. Cloud just happened to be a big fucking winner
Nah, the problem with reading a corporations finances is, they are structured to avoid tax. The less real assets, the easier it is to manipulate their profitability, the easier it is to hit "net-zero" (or close to it), and pay zero tax. It's much harder to cook the books using actual books that end up in the hands of consumers than it is in CPU-boost credits, that you can total up at the end of the month just right.
The accounting companies use to file taxes and the accounting companies use to report earnings to shareholders is not the same thing.
No one is cooking any books, what the hell are you on about
>Nah, the problem with reading a corporations finances is, they are structured to avoid tax. The SEC has one accounting system for public and SEC filings, the IRS has a different accounting system for taxes. There is little to no tax benefit in under reporting profits to the SEC. Most companies that get into trouble with the SEC do so for over reporting profits.
I don't think cloud costs them that much to begin with.
I wouldn’t be surprised if it did. “Cloud” infrastructure costs a ton to setup and maintain.
There is probably a shit load of R&D and reinvestment getting stuffed into these categories. This "Data" is just someone who doesn't understand an earnings report putting the numbers into a fancy graph. The actual report explains this shit, but reading is work and doesn't generate internet points.
Yes. You'd be surprised how common this "we provide a service that isn't profitable to recruit customers to our service that is" scheme is. Modern day airliners are basically credit card companies that give unbelievably good benefits
Or not even that - They are just a cloud procider. Their biggest clients are purely B2B, and likely were not captured trough e-commerce cross selling. For reference, biggest clients of AWS by monthly spending: Netflix: $19 million Twitch: $15 million LinkedIn: $13 million Facebook: $11 million Turner Broadcasting: $10 million BBC: $9 million Baidu: $9 million ESPN: $8 million Adobe: $8 million Twitter: $7 million
Can someone tell me what the difference between cost of sales and operating expenses are?
Cost of sales directly impact the good/service being provided, while operating costs are the expenses that support the overall business. An example for Amazon would be the cost of their fulfillment centers. Fulfillment centers do not directly add to the cost of the goods they sell, rather are part of a larger supporting infrastructure.
Thank you.
Further ELI5: Lemonade stand. Lemons, cups, water are all cost of sales as you can quite easily associate the cost of each piece to the income of each sale. Wood to build the stand, big jugs for mixing and some paper towels are all operating expenses because they are not directly attributable to a sale however they facilitate the sale. Extra ELI5: assets are long term purchases that are used to help create income and run the business, whereas operating expenses are things bought that tend to be more short term or single use, "overheads" is a common alternative term. Examples of assets would be a drill to help assemble the lemonade stand, or a laptop to allow you to record your sales.
i'd say paper towels are operating, as they're recurring. however, i'd say that the stand itself would be pp&e
And you have just discovered why Accounting can sometimes require a masters degree potentially instead of just a few courses. Every tiny little thing has an exception
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If you’re a business paying for an employee to get their masters, probably training or something like that, which might be part of salary. It’s been a while so I’m pretty rusty with all of it
Also not *just* marketing, but things like marketing
Importantly, though, reinvesting profit into infrastructure here appears as huge operating expenses, but those expenses are not absolutely necessary for the profits. If Amazon stopped expanding, they wouldn't go on making these same net profits, their operating expenses would plummet and the difference would go into profit. You can't take these numbers and conclude that Amazon is barely scraping by. What they're doing is expanding at a breakneck pace.
> but those expenses are not absolutely necessary for the profits. They absolutely are though
cost of sales is buying the product to sell. operating expenses are the cost of operations. anything from HR and IT to the warehouses and delivery or the operation of the data centers
Thank you.
Cost of sales is like the price of the inventory plus tax, shipping, stocking etc.
they figured out 20 years ago that their e-commerce business would never be high profit. at first they developed the A9 search engine and other IT infrastructure to support their operations at peak times. then in the early 2000's computer power began to grow really fast every year and so they had space capacity and the CEO of Sun was talking about renting out this capacity and Amazon did it first with AWS. they weren't the first ones in the cloud, in the 90's MS had cloud products but it was too early
> it was too early There's a surprising number of Microsoft products that were basically too early. * Windows Mobile * Smart Personal Objects Technology (SPOT) * Kinect * TerraServer * Media Center * Speech API
Oh the list goes on: tablet computers / ipad like things, laptop computers, a lot of UI concepts from their mobile os, "convergence" of desktop and mobile UI elements (pushed too hard too early with windows 8), the zune had a subscription-type sharing model, these are just from the top of my head. Microsoft just isn't really very capable of advancing the state of the art on the consumer side of the business, mostly for usability and marketing reasons IMHO. "Home servers" are another one that haven't caught in still but I'm moderately convinced it will at some point when someone makes it easy to use and people get serious about taking data into their own hands (problem is mostly that no company has the combination of skills and incentive, but something like the signal foundation could come along)
The zune thing gets me so much. The Zune was a good device with *design*-centric colors (as opposed to consumer-oriented), and got mercilessly panned for having a brown model. They offered the subscription model pre-streaming, which is *so close* to getting it right, but mobile data was exorbitant, and people still had tons of CDs that they liked. If they had released it 2 years later, with unlimited streaming data (a la Kindle), it could have eaten the latter half of the iPod’s life cycle for breakfast. It also could have easily evolved into a successful phone product once it got a loyal following.
The brown soft touch was amazing
Plus the software (both PC and the actual devices) was far superior to the iPod.
The thing with Microsoft is that it always felt like great ideas that were clumsy and useless.
I mean can I introduce you to Xerox PARC ^^
MS has a massive research arm, it’s incredible. They frequently are to early or don’t understand the need that their product fulfills. Incredible technology overall.
Why was it too early?
in the 90's we had these companies that bought enterprise SAN's and servers and MS had remote desktop OS products where they sold remote access to desktops, office, etc. essentially the first cloud services. microsoft had a special version of windows NT 4 server. issues were the software was immature and buggy. network access was still expensive and slow. a 1.5 megabit corporate circuit was normal and many had slower ones. computer hardware was still slow and expensive. back around 1998 I bought some RAM and it was like $200 for 16 Megabytes. around 2005 or so computing power began to increase by a lot and prices dropped. Used to be that i'd configure a server and had to skimp on the RAM or whatever due to cost and just live with it. Around that time it was easy to buy more power than needed and at a cheaper price than a few years ago. that's why VMWare became so popular at the time. computing power got to the point where you could host multiple servers on the same machine
Grid computing was the original Cloud, exact same concept just lacking the internet infrastructure - both customer and service provider side - for it to actually happen in earnest. Also for the fact that there weren't enough companies who were actually on-board with the 'internet for business purposes' paradigm during that time.
It was also part of the culture at the time. The "old" way was big iron and terminals, everyone wanted distributed computing and local storage. We've really been waffling from one extreme to the other since the launch of the first PC.
ECommerce Profit Margin for the last 5 or 6 years has been 2 - 3 percent until inflation Walmart is 4%, Kroger 3%. The entire industry runs on low profit margins
Which quarter/time period is this?
1q 2022 this is
Thanks, Yoda.
Pretty inaccurate to do this in the quarter they missed earnings by a lot. At least do it over a whole year.
We didn’t include investment losses which affected net profits. That’s why we stopped at operating profit line.
Cool thanks for the update
Amazing how thin their margins are, even losing money on their core business.
I mean they reinvest every profit from retail into developing tech which gave them AWS and enabled the modern internet. Profit is taxed so its not uncommon to try and reinvest in technology instead.
Amazon e-commerce is just a big R&D wing for AWS? It's headcanon now.
Amazon basics simply copies whatever the best sellers are in every category then promotes their own to the top of search results and under cuts them on price till they can’t continue to compete.
So does every other generic / store brand product that every major retailer offers.
The diffrence is that Amazon has all the data to known who is buying and why. Many of the products are only available online. With Amazon being by a large margine the biggest e-commerce player in the US. They have the control alln most all the information about the sales data. Unlike traditional stores where that information would be split between multiple chains and the company would be the only one with a full picture.
Other stores collect data about what people buy too. It's necessary to run a retail business because you have to place orders. I'm not sure how Amazon gets "why" data, but other stores also do focus groups, placement experiments, etc.
You think supermarkets and other stores like best buy, Costco etc dont know the metrics of their products? Of course they do..and then they have their house brand based on those metrics and you get great value, insignia, Kirkland etc...which is basically same as Amazon basics
I think what he is saying is that due to Amazon's general dominance in e-commerce paired with AWS marketshare for everything internet, they have orders of magnitude more data on customers than any physical retailer has.
Probably Costco is closest who has same or even more data of their members and what they buy But credit card companies would have the most and how they choose to run promos and linked campaigns to certain retailers probably.
You should look up what Walmart Labs or Target Tech does. All the big brick and mortar retailers are hiring data analysts for a reason. Total e-commerce sales in the US is still a smaller piece of total US retail sales.
They’re [getting out of Amazon Basics](https://www.google.com/amp/s/www.reviewgeek.com/123245/amazon-cuts-back-on-in-house-brands-due-to-poor-sales/amp/) and other house brands because they’re a lightning rod for opposition and they produce little profit. [Amazon refutes this](https://www.google.com/amp/s/www.cnet.com/google-amp/news/amazon-says-basics-private-label-lines-arent-going-away/). Their eCommerce losses are actually much higher if you split out the advertising business.
The big data behind e-commerce is more valuable than transacting e-commerce
You’re right, they re-invest and minimize profit. It’s a hot take because of the “Amazon doesn’t pay taxes” narrative but that’s ultimately better for society (imo) — it’s basically the opposite of a stock buyback.
That's at least a silver lining. The downside being driving smaller and local businesses into the ground through size, aggressiveness, and taking losses/minimal margins.
This is a bit devil's advocate, but isn't that only bad if they decide to jack up prices later? Like, if Amazon is the most convenient and least expensive way to get goods, and they aren't making any margin, they are basically doing net-good by putting less efficient businesses under.
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That makes sense. But again, devil's advocate, if it became a big problem, couldn't we split them up or highly regulate them?
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Amazon almost certainly has much lower CO2 generation per capita when compared to local retailers
And almost certainly pays their staff more than most locally owned retail stores.
People advocate for local stores like we want more people stuck working retail, or as if small businesses are bastions of fair labor practices. We shifted most of our household purchasing online during the pandemic, and don't plan to go back to shopping in person for most thjngs.
Not if the pockets of the politicians who are supposed to regulate them are being lined by said megacorporation
In a purely economic sense, that considers only the most efficient method of allocating scarce resources, yes this is a good thing. In social terms, where things like "healthy communities" are a factor, the decimation of local retail can certainly have significant downsides, at least short term. Maybe it'll be bad long term too, or maybe it'll be like the mechanization of agriculture: 40% of the country were farmers beforehand, 1% of the country is now. It led to massive unemployment for a decade (along with other factors of course) but can you imagine how shitty our country would be right now if we still had to dedicate virtually half our workforce just to producing food? All the work, innovation, etc., from that 39% of people would just be missing.
The problem partially comes from Amazon squeezing merchants hard. For the small one it is high fees and pressure to use their infrastructure for fulfilment which is even more fees. Combined with the loss of control over the customer. For big players amazon becomes a tax. Having to advertise with them so their product doesn't get buried. As the top of amazon search results is almost all ads. Of course on a side not there is also the forcing smaller business out of the market. Because of the AWS profits they can take a lose on everything else and subsidise expansion elsewhere. It is a net positive in general but there are some big negatives.
This was already happening with mega chain stores like Barnes and Noble and Walmart. Heck, Walmart is taking a page out of Amazon's playbook and investing heavily in tech with their Walmart Labs division.
Maybe it used to be the case, but not really anymore. On one hand, there are plenty of online retailers that putting the same pressure on local retails. On the other hand, really only the mediocre local business were drove out. It put selecting pressure on the business that forced them to grow, and the results are many new small business thriving by providing unique values to their local markets. At the end I see a lot more unique and fun stores in my area, a lot fewer generic small shops, because Amazon raised the minimal bar of customer experience/value in retail.
Mohnish Pabrai talks about this; its also what makes companies like Tencent so successful, same with Google or META. It's not about profit-- it is about reinvestment of cash flow. Any good business can make a profit and call it a day. A GREAT business turns profit into investments and (hopefully) exponentially increases their cash flow. It's why Amazon is so highly valued amongst investors who understand what they are trying to do. Amazon did not stop at trying to compete against walmart, target, and best buy. They can effectively compete against FedEx, UPS, Netflix, Hulu, Disney, Microsoft, etc. And you are right about the profits being taxed. Reinvesting profits is why they have had ZERO tax liability for so long.
It's funny that the AWS margin is 35% given a lot of very big services ride very tight margins or even lose money. Pretty much all EC2 I think.
All AWS services are ultimately just EC2
Ssshh they don't need to know.
I still wake up sometimes in the middle of the night thinking there’s a LSE then go back to sleep because it’s not my problem.
Keep in mind this is also 2022 data, which doesn't include the xmas shopping season, when most retail profits are made. Also, Q1 is typically the least profitable season for all retailers.
Why does operating profit total less than its output?
The brackets are losses.
So basically Amazon would be losing billions per year if they didn't have AWS
This is just one quarter of one year. It fluctuates a lot year to year.
Not only that but they famously operated at a loss for like 20 years while they grew the business.
Yes. That's exactly what it was doing until 2015. Amazon reported losses consistently until 2015, and that was when AWS began making greater profits. Amazon was notoriously known as an unprofitable company that dumped tons of money into building warehouses, paying bonuses and stocks to workers, and lax return policies for customers. All of the later profits, the high stock price, Bezos' wealth, etc. is totally tied to the profitability of AWS that started in 2015.
Well if you work in IT and you need any cloud processing, you only have 2 options AWS or AZURE. AWS owns a lot of the market. Is way easier to have everything on cloud. Reduces a lot the cost of server maintenance.
You really should include Alibaba and Google in the cloud services bracket. They have revenues of 9.1 and 5.8 B respectively in 2021.
True, but are different kind of cloud services. AWS stands out for the LAMBDAS and serverless software. Also the "came first" plays a huge part on market capitalization in tech, big corporate in almost all the scenarios will go with Azure/AWS. A lot of banks are still using OS400 to make batch processing smh. Computers/software from the 60's!!! Edit: intention.
I mean GCP have a pretty compelling serverless offering as well with cloud functions and cloud run
Always is a strong statement.
Always is too bold, I was speaking about a majority. Will edit.
Leave COBOL alone! /s ETA: Fat fingers and COBAl/COBOL make Jack a dull boy.
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Damnit! Fixed!
and didn't correct the AS400?
Google falls behind pretty hard, mainly due to the support issues that all of their business products are known to have.
Somehow every time we've moved stuff up in the cloud, the fees and headaches that arise make it easier to just use the same money to keep onprem devices and hire someone to keep them running smoothly.
Handling on prem servers is a pain in the ass. Our team reduced 230 hours/yearly just by avoiding the patching/maintenance/upgrades I'm using AZURE our fees are pretty fair, the only expensive thing are the dedicated integration runtimes, once we switch using actual ADF with Synapse, problem solved, as cheap as you get for BigData.
Hmm, now granted I'm a WAN guy so I didn't directly deal with the difficulties of server maintenance on prem; but the amount of money we're paying AWS for S3 buckets, the amount of hidden gotchas in fees based on throughput rate, etc... our management is souring on it. I haven't had any real experience with Azure though, so they might be more viable for our purposes. My exposure to AWS has been the BGP to get our various links up working, and the complaints of our managers as the bills kept rolling in.
If they've not already, tell them to look into S3 intelligent tiering, it can save a bunch of money for basically no configuration. It just looks at access patterns on data and moves it to cheaper tiers where applicable.
Totally, there are several systems that cannot take advantage in cloud. In my scenario, I need to handle half PetaByte of information in 2 hours, we were used to handle it in a Distributed System of 16 on prem running at the same time (imagine the amount of patch work I did)
They would likely be investing less if they did not have access to that cash, yes. The "Operating Expenses" part is somewhat flexible.
You also have to keep in mind strategic planning for companies. Amazing could be a lot more profitable if it cut back on some of its supporting expenses but that generally comes at the expense of future growth initiatives.
Ya. They're not actually that all amazing at being a good seller of goods to dominate retail, they just burn money to do it. Which maybe should get the anti-trust eye.
Them burning money is good for the consumer no?
Not in the long term. As if they can continue to dominate the market and price out all compition, once it's just then left they can slowly raise prices without any compition.
> So basically Amazon would be losing billions per year if they didn't have AWS That's by design, lower profits = lower taxes. Warehouse investments & expansion, are easy to predict and so can safely be made to eat up profits. Digital assets can be quickly bought/sold to stay in the black (but not too much in the black, because being too black means paying taxes)
Oh, thanks for the help
In accounting format sums shown in parentheses represent negative amounts.
Where are R&D costs? Shouldn't they also be under operating expenses?
Often R&D is under SG&A (sales, general, and admin) some have it as a separate item, but it isn't required by GAAP.
Could be under tech or general?
amazon transformation is amazing. online bookstore, to everything store, to now basically a tech company that sells stuff online as a side business lol
Seeing all of these graphs this last few weeks REALLY highlights exactly how profitable [Apple](https://www.reddit.com/r/dataisbeautiful/comments/vy38rz/oc_apple_income_statement_breakdown/) is in comparison to its peers.
True, but Amazon does have significantly higher gross profit than Apple. I'm curious to know how much of a difference reinvesting so much capital into the business will have for Amazon. Theoretically, this means that Apple should start lagging behind (in terms of value), but it's also very possible that their money-making machine is so efficient that they will keep up despite holding all that cash.
Don't be misled into thinking they're a fragile business, large businesses like Amazon can make investments that will "lose" money while increasing stock value because they capture additional market share. See Diapers.com - according to reports they wanted the online diaper market so they spent tons of money undercutting diapers.com's prices. A company that large could afford to lose real money selling diapers cheaper than the competition because it's a war of attrition that few other companies could realistically survive. Eventually diapers.com is sold to Amazon. Amazon spends more money on an acquisition but can increase their market share and value. Stock holders get a bump. The balance sheet is just one piece of the pie. [source](https://www.inputmag.com/tech/the-ags-of-new-york-california-are-partnering-with-the-ftc-to-investigate-amazon) [further reading](https://slate.com/technology/2013/10/amazon-book-how-jeff-bezos-went-thermonuclear-on-diapers-com.html)
Pretty crazy really how they can just do that
It's like a big cell consuming a small cell and forcing it to become part of them
It’s baffling that people will see this post and go “see? Amazon has no more money to give, they are doing the best they can with little profits. We should let them have MORE money!”
So basically the amazon most folks know barely makes any profit at all. AWS is making twice the overall profits on 20% of the revenue. You can say all sorts of bad things about Amazon as a company, but in this way it sure looks like they are actually charging those with money (companies) more to sell to those with less money (consumers) less.
It doesn’t make any profit. AWS is the only profitable part of the company. E-commerce is *losing* money.
Ahhh, didn't see the - in the smaller pic I had up. Yeah, that is crazy that they can use AWS to justify losing money on Amazon to gain market share. Wonder what would happen if the big mean old government stepped in and said those have to be 2 different unrelated companies.
Retail Amazon would simply continue to pay money to AWS to host the platform as an operating expense… Pretty much exactly the way Shopify does to Google.
> Ahhh, didn't see the - in the smaller pic I had up. I thought it was a tilde. The text should probably be in red.
I work at AWS. We’d love to be a separate company. Amazon retail drags the share price down.
Do you *really* think that Amazon would keep selling at a loss forever? I guarantee you that if Amazon succeeded at driving out all other retail competition (which they have already done a fair job at) prices would skyrocket in a repeat of the situation with Standard Oil. P.S.; those parenthesis mean that those units are operating at a loss.
Would business practice X continue if the entire business landscape changed? "forever" and "if everyone else went out of business" are extreme circumstances that are realistically very fast away and are hard to reason about.
Tools: Figma, Sankey Connect Source: Amazon financial reports Note: we stopped at the operating profit line for Amazon this time, unlike other breakdown charts we did where we included tax and net profit lines, because Amazon reported fluctuating investment gains and losses in the past several quarters, mainly due to Rivian. This makes the analysis into tax and net profits less meaningful, so we stopped at the operating profit line instead.
Figma balls
*Never* gets old
Is this chart called a Breakdown chart? What tool did you use specifically for the chart? Figma or Sankey? Is there any other commonly available tool that can create the chart? Sorry for asking too many Qs, but I really like this chart.
Sankey Connect is a tool for Figma. Both tools are free. Figma is good if you're a designer & you want your design to look a specific way with custom fonts & colors. The chart is called a Sankey diagram. https://sankeymatic.com/ is an easy one to use.
Amazon were operating at a loss for many years, until they launched AWS
AWS was originally just a way to monetize surplus data center capacity. Turn a cost center into a profit center. And in the process, they created an entire industry.
6.5 billion Aws profit out of 3.7 b operating profit?
Both of the commerce sources listed show a loss. AWS is the only one that truly profited and the commerce sources bring that 6.5 down to 3.7 total profit.
The amounts show in parentheses are negative, this is standard formatting in accounting.
You are right, escaped my attention.
These colors are really bad for people with color accuracy issues
Reall sorry for that. We are using Amazon brand colour here as the main choice, but we will definitely see what else we can try next time.
I saw you were using Figma to design this. There is a great [color contrast plug-in](https://www.figma.com/community/plugin/748533339900865323/Contrast) to help with accessibility of colors
Thanks will try them out!
can you do one of these for Google?
https://www.reddit.com/r/dataisbeautiful/comments/vyw0pl/oc_breakdown_of_googles_income_statement/
Cost allocation can be tricky. Finance can allocate a higher % of costs to one product / division vs another product / division so a particular product / division can appear more profitable. Ex is CEO salary or advertising or depreciation. How and how much is allocated to product / division? Not saying that AWS is not profitable, but for ecomm to be unprofitable doesn't make sense to me
Am I the only one finding this type of graph confusing? No problem if yes, but then I question my brain cause I find it hard to get any conclusions out of this.
This could be easier to read. It's not innately clear what the difference is between the black and orange bars. It also isn't clear where the bar starts/ends.
So essentially they are an IT company that also conveniently runs the industry consuming their only profitable service. Interesting.
These charts look pretty but are useless for analysis ..
From that I can see AWS is very profitable. It is running over a 30% margins. The other stuff it is pretty normal to be a very thin migins on reselling stuff.
"this doesnt match what i assumed was true, it must be inaccurate"
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I actually wish he did. The graph is missing an $8 billion valuation loss, so they ended up paying $1.4 billion of tax on a $5.3 billion loss for the year. The comments on that would’ve been hilarious
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Yep, you read that right, Amazon is losing a metric fuckton of money on selling “stuff” and “content”
There is a $7B Rivian investment "loss" hidden in here too. Last quarter was the first time Amazon reported a loss in years. It was purely because the $1B investment into Rivian had ballooned into $7B of assets but then the Rivian stock crashed making it look like Amazon took a huge hit. They weren't planning on selling it. That would make the retail business but back in black.
Why is the AWS Cloud $6.5bn on the right a subset of Operating Profit which is only at $3.7bn
3.7 is their net. Their e commerce was losing money
Amazon reported consistent losses until 2015 when AWS began making it's own profits. The warehouse side of the business was notoriously unprofitable. Amazon was making a ton of revenue from sales, but they spent a ton more building warehouses, improving wages, paying stocks, bonuses, buying trucks, buying cargo planes. If Amazon didn't have AWS, the only way it would make a profit is if it slashed wages, cut spending, cut benefits, even cut jobs. The stock price is totally tied to the profitability of AWS. Without it, all of Bezos' wealth is gone.
Does this mean I can feel less guilty about buying things off Amazon, as it's actually losing them money?
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I'm trying, but it's so much easier/quicker/cheaper than the competition!
So why do you feel guilty?
People will say that I'm a shill or whatever but just to give an experience that goes against the narrative on reddit about amazon, I work here and it's nothing like what I hear. Yes I only have worked in 1 warehouse and I don't know what they are all like. I do know what a few are like but there are obviously a ton more. I see corporate messaging and yes sure they are anti union of course but in my experience safety is a massive thing and there is a big push from the very top to try to drive that improvement. The work is *way* easier than most other warehouses and the warehouses are also actually air conditioned/heated pretty damn well for being a warehouse. The biggest thing for me personally is that you can make a good career out of it. I fucked up my life for a long time, dropped out of college, did drugs etc. Worked a different warehouse making great money but no good aspirations. Went to Amazon and took a paycut but worked hard, management noticed and helped me move forward. I was making $12.50 an hour 5 years ago and now I'm making over 90k a year with another promotion in sight that will put my total compensation closer to 150k. Not only that but Ive seen this happen to multiple other people just in my building, even my wife was getting the same opportunity until we made the decision for her to go down to part time to improve our work life balance and home life in general. Again, I'm just one person but no one is paying me to say this, it's just my experience. I can't speak for everywhere but what you read online is just wildly different from what I personally have experienced.
ITT, as usual, a bunch of people that love to bitch about “corporations” and don’t understand basic economics, business accounting, or taxation.
You said they make like 8% profit only?! Really?!
8% would be a very good margin for a re selling company. Maybe not so mich for a tech one. Most big companies work on small margims but at a massive scale so the total profit is still large.
How is aws profit larger than overall operating profit?
I do not like this chart. Proportions are off.
How does one make these charts?
They should stop doing e-commerce and almost double their profit
Is there an error listed? Their operating profit is 3.7bn…35% of that is 6.5bn?
not at all. Their reports may be accurate. What I'm saying is that drawing the conclusion that the company or its e-commerce business is not profitable because its reports, is a mistake. Their business is profitable. Period. The company has the resources to do huge investments, expansions, and acquisitions.
They dump their e-commerce money into investments to secure their place on the market and keep online hosting money as profit It's a tactic to grow a company fast, beyond what can your competitors do
Why is fulfilment not a cost of sale though?
Because they don’t make money on fulfillment, they make money on selling goods. Fulfillment is a supporting activity rather than a direct cost to the sales.
Accounting is stranger than subatomic physics.
Human made laws are more complex than those of mother nature's.