Top 5 Ways Amazon Makes Money

In this article we are going to list the top 5 ways Amazon makes money. For a detailed coverage of this topic and a more comprehensive look, please take a look at the 10 industries which explain how Amazon makes money.

5. Prime Video

Amazon launched Prime Video which is a simple subscription based on demand video platform which has entered a market which isn’t more than a decade or two old, and which already has a lot of competitors including Netflix (NASDAQ:NFLX), Hulu and HBO, not to mention Disney which launched its own streaming service this year.

4. Artificial Intelligence Assistant

When Apple (NASDAQ:AAPL) debuted Siri, an artificial intelligence assistant which came equipped with every iPhone, Amazon knew it had to make a move and do it fast, in a new industry and hope to capture a major market share. Its launch of Alexa and the subsequent launch of devices supporting Alexa showed has now made it the biggest artificial intelligence assistant company in the world.

3. Amazon Basics

Not content to just sell products created by other companies, Amazon went into the manufacturing business and manufactures consumer electronics at extremely cheap prices which include its extremely popular Kindle e-readers, Fire TV, Fire Tablets and Echo devices which have all been huge hits. Apart from that, Amazon also manufactures many basic products at cheap prices which are reliable, and is hurting competition here as well.

2. Amazon Web Services

Amazon Web Services is one of the biggest cloud computing companies in the entire world, and is actually the most profitable venture that Amazon has. In fact, it is safe to say that without Amazon Web Services, the company would still be struggling to make a healthy profit. Out of a total net income of approximately $11.6 billion, $9.2 billion comes from AWS alone, which is incredible considering the fact that it only accounts for $35 billion in revenue out of a total revenue of $280 billion in 2019. This is despite strong competition from Google (NASDAQ:GOOG) and Microsoft.

1. Online Retailer

Of course topping the list of industries which explain how Amazon makes money is of course, the fact that it is a huge online retailer with hundreds of thousands of products available, and over $141 billion of revenue being derived from their online store. Being able to deliver any product within two days and that too for free if you are an Amazon Prime member, means that most people prefer Amazon. Add to this their excellent prices and the ease of access of choosing across so many products, there is little doubt that Amazon will only continue to grow, even though there are already claims that it is on its way to becoming a monopoly.