For The First Time, Amazon’s Own Sales are Less than Half of its Total Business

Amazon is well-known for its identity as an online sales company. It’s the first thing that nearly anyone would associate with them, since that is their primary means of profit. And yet, for the first time since Amazon’s inception, their online retail profit is less than half of their net gain this quarter. Granted, this assessment doesn’t take into consideration the sales made by other companies that are using Amazon’s platform, but it is still a sign of the company’s growing field of interest and influence.

Having started as an e-commerce retailer that sold books, Amazon first spread its arms into the all-in-one store sector of the internet, becoming notable for being the place you could go to buy nearly anything. Now they are one of the foremost pioneers into cloud computing, thanks to its Amazon Web Services. It even branched out into brick and mortar stores with Whole Foods and other ventures. Beyond that, Amazon even has its hands in advertising, entertainment, and of course, shipping.

Amazon Chart
Amazon’s first-party online sales dipped below 50 percent of the company’s overall net sales in the first quarter, reflecting the growth of the tech giant’s other businesses. Credit: Geekwire

Of course, even though Amazon’s online first-party sales portion is still by far its greatest segment, this quarter was the first time that all of those other aspects of Amazon collectively surpassed the online retail part. Of course, it might be a little unfair to judge a collective mass against a single aspect of the company, but it is still interesting to note that the online part of Amazon made less than half of the company’s profit in total this quarter.

Their quarterly net sales were about $59.7 billion, and Amazon posted $29.5 billion as their net profit due to online sales. That’s just under fifty percent of their profit for the quarter. So yeah, even though it made up half of the sales this quarter, it is only down by about half a percent in comparison to all of those other aspects of Amazon.

That said, its not likely this will happen again in any decent time frame. At this point in time, Amazon makes up about half of all e-commerce sales across the internet. While its many other branches are growing, the e-commerce division is still outstripping them. Even if it does fail to make up half of their profit again, it is likely that it will continue to be by very small margins.

Amazon Geekwire Chart
Credit: Geekwire

Ultimately, this is just an indicator of Amazon’s growing strength in various parts of the economy. What this means in the long run is up for debate, but Amazon will probably rise to prominence as a titan of the economy, like Disney is for entertainment. It certainly seems to be heading in that direction considering their ever expanding reach into several areas. Whether or not any competitor or group of opponents will manage to stymie or at least match their growth remains to be seen, though many companies, such as Walmart and Target, are already trying. One thing is for sure; Amazon will continue to grow into more aspects of our everyday lives.

Related: Walmart and Target Shares Fall as Amazon Prime’s One-Day Shipping is Announced

Source: geekwire.com

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