How Amazon Makes Money
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- Опубликовано: 17 фев 2019
- Amazon reported a record net income of $10.1 billion in 2018, which was a considerable jump from $3 billion in 2017. CNBC breaks down where exactly the money came from and how Amazon Web Services, advertising and the third-party marketplace are driving Amazon's increased profitability.
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How Amazon Makes Money
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Basically, Amazon wants to be everything.
Once upon a time Sears was that. Then once the founders died; the people who took over control SCEWED the business! Hart-breaking!
Burd duh
That's not gonna work outside of US though. Regulators are sensible everywhere except in the US.
A--->Z
Nothing wrong with that! ;-)
Amazon's great customer service goes a long way. It's a big reason why consumers keep coming back to Amazon (in addition to it's low prices). Other companies need to learn from that.
Honestly the best customer experience I've had with any company. Not because they end up refunding often, but because they're quick, efficient and understanding to resolve an issue
Amazon have the biggest problem out of all of the companies with fake reviews, and many other problems too, but the ability to quickly and easily refund is what keeps me coming back even though I know I shouldn't until they clamp down
I agree regarding their great customer service but not on low prices especially here in Canada. Their prices are much higher than ebay or other websites whenever I compare
can easily refund anything for ez scams
Legion Slots they’ve got so much money they’ll refund anything if it means you’ll keep using them. I’ve honestly never experienced better customer service online
Amazon's growth is due to the global market breakout in service esp marketing and advertising...what a success story!
Matthew Penjueli more than that tho
Matthew Penjueli Amazon was able to meet the e-commerce demand and compete in pricing as well.
@Telly Vin-a I think not...last year is the 1st time Amazon have a huge profit margin...so if that continues, the stock value will rise. remember that the 1st 8 years of operations of Amazon are losing money...
kesshav
This dude Mark Mahaney just ordered me coffee off my alexa while I was watching this video
Mine too
Does Alexa make coffee?
LOL Sneaky way of Amazon
Lol
Sue him
They probably made 1 billion dollars alone from northern Canadians because they charge $300 for shipping!
They charge $300 because you live in the middle of nowhere and it costs them $298 to get it to you.
@@KrikitKaos Dog sleds
And the northern Canadians aren’t even 60000 people lol
Rural people are the stupidest. They live in a expensive place with no jobs and they expect jobs to come to them.
@@jasinbiggs7189 No, we live where the food grows and given the choice id eat before id get paid.
I am surprised that Amazon does not make most of it's money from e-commerce
i see alot of those returns, and i mean alot.
@@NotYourAverageTrucker There are a lot of negative consequences with their tactic of returning everything. It is a monopoly tactic. They don't care aslong as you return to them. So they can keep selling AWS and ads. Meanwhile, 3rd party Amazon sellers instead of profit lose the item and also lose the money instead of earning... which is a cost, instead of a sale. And bad for the market, not allowing the rest of the companies to compete with these tactics. Obviously this should be stopped by the people
@@NotYourAverageTrucker having worked at an Amazon warehouse I can tell you that the company looses billions due to returns and theft.
@@8DeaD7 why should you do less to let others get more? Tf?
And you think others would let Amazon take their market share if they weren't big just for the sake of sharing it out?
Cant shipping so cheap impossible to.
Very Innovative with fire TV stick, echo, Ring and sales from popular tech RUclipsrs.
Anyone else's Alexa go off while watching this video?
Kyle Papili the fact y’all still fw Alexa in anything is a joke
@@Chris-rg6nm she?
@@shohamdas Stop
Mine ordered coffee at 4:35
haha scary!
LOLLLL when the guy said “Alexa, order more coffee” it triggered my Alexa
Moral of the story, you should have bought amazon stock in the 1990's. You would have been sitting so pretty now.
Or even at the time you commented this
Thanks a lot Sherlok
while watching this video, Jeff earned 3 year of my salary
These interviews were taken place a few buildings away from me at Salesforce tower. I love it!
They’re by far my favourite retailer to shop with. Amazing customer service, amazing prices and prime has brilliant benefits.
Nobody else is anywhere near as trustworthy for those kinds of prices.
This was very informative! It would be really great if this video could be brought upto date.
CNBC is doing some great work with these videos
Very In Depth.
Thanks.
My Alexa just added coffee to my amazon list. I don't even really drink coffee.
How do you even manage Alexa, if you live in a house with somebody called Alexa? lol xD
0:40 I've never heard "inventory" pronounced that way before
Neither have I!
Thumbs up x 5,000!
I was hoping someone posted a comment about that!
My Alexa picked up on when he said "Alexa order coffee"
4:33 NO ALEXA don't order more coffee xD
Great episode. Thanks guys!
AWS will soon have a lot of competition
elaborate
C R I S C O ,In the cloud business,you have IBM ,which just bought Redhat , Microsoft taking share away from Amazon,etc...! In the retail ,you have Walmart,Target,and a myriads of other retailers , that are embracing the online sector with ferocious determinations ,in order to not only survive,but to compete with Amazon; I can go on and on ; But the Debt is the Achilles ‘heel of Amazon ;
They even paid 13.5 Billions Dollars in Debt for Whole Foods!
Also ,people will start migrating from the Amazon platform,to others platforms,because of all the bad publicity,Jeff Bezos’s extra-marital affaires,etc...!
BYW ,I buy occasionally stuff that I can’t in the brick and mortar stores,like Bed,Bath,and Beyond !
It already does, Microsoft Azure earned more then Amazon on last quarter of 2018.
This video also is a prime example of why many are shifting away from AWS as well. IIRC Walmart (was it) recently moved to Azure from AWS due to the recent "we wont compete with you" mantra that GCP and Azure have recently been putting out
AZURE >AWS
Well done CNBC. You've started making good videos without the annoying subscribe lady at the end. Very professional, finally.
I see amazon vans in my area often but never see them actually delivering any parcel.
Great ideas from great man
5:00 Growing at 20% is impossible...
COVID-19 has joined the chat
Amazon is providing great customer experience, that's the key!
Amazon is getting closer to being able to buy Walmart. 🤣
SIKE
@@ancientkid1635 Dude...........are you kidding me??? Walmart is actually 25 times bigger than Amazon
@MattS_RANTZ49 Dude...........are you kidding me??? Walmart is actually 25 times bigger than Amazon
Dude.....are you kidding me??? Walmart is like 25 times bigger than Amazon.
@@aceshadowins1310 Yaa Walmart is 25 times much bigger than whole of Amazon put together
Thanks for the info!
CNBC producing amazing content
Wow amazing really when you think about it. That means the customer wins as prices will be super low no other competitor could stop Amazon.
Amazon deserves the the place where it's right now. Not just because of its products value and delivery services at time but the customer service is also great.
🙏
Let's put it this way no successful company cares about what brought them up.
Ie example McDonald's doesn't care about the burgers joints, they have tons of other companies they run that are much more profitable.
Like basically owning every building in which McDonald's franchises operate. Whether the franchises make a profit or not, McDonald's gets the rent in every month. That's the real business McDonald's is in.
4:34 how many of y’all’s Alexa just went off...
@4:33 this guy actually ordered coffee on my Amazon account because Alexa heard it....I'm not even mad about it. 😂
Thanks, you just made my Echo try to buy me coffee.
As a buyer I love Amazon, as a seller I hate it. They make at least 15% leaving most sellers with only 5% profit on average.
Sellers take their time and risks with their money buying inventory, and if they find a good product that becomes a good selling product, Amazon will watch the sales growth, finds the supplier, buy huge volume for lower price, and undercut your sales. Then you ended up with a stuck inventory or forced to sell below cost price.
Once Amazon eliminates most of other independent online sellers, and becomes the "only online shopping source", they will do whatever they want, leaving buyers no other option but to buy from them at their terms and prices.
Jeff Besos is a smart, egocentric narcissist with evil long term plan. Watch and see, it's coming.
Just like the game "Monopoly."
Sheer Volume in Shipping and Manufacturing. Also getting Grade A Buy Rates with Carriers like Fedex. USPS and UPS.
Amazon will rule the world in more upcoming years.
Only North America not whole world
along with Disney
Arkham Assassin boi if you don’t
@@AndrewSuaste Star generating profits.
Not in Asia
This is crazy how profitable AWS is comparing with other services like advertising or 3rd party marketplace if we estimate the profit margin of AWS (approximately 28.7%) comparing with the others (app. 1.6%)
Does anyone else hear the slight beeping / speaker peaking in their interviewees clips?
Yes
I really hate the repeated Dubai commercials. and the Bloomberg ones.
So informative.
Try and buy something online, without going directly through a store. What avenue do you find?
I work at home. This time last year, my company started using Amazon connect VOIP. We were then able to get rid of our landline phones. We log in to the app and talk away.
I'm sitting inside an Amazon air aircraft as I'm typing lol
hahaha you will be delivered really fast then to your destination.
While watching this I checked the status of my parcels in transit by Amazon :-D
Hot damn, that was a super interesting video, thanks!
This video is very helpful
flipkart left the chat
Haha
Indian spotted
🤣🤣
Airbnb spends a bunch on web servers yet their website is pretty bad.
and this is an Amazon video?
Amazon's own website is pretty bad
If you're talking about how hard is it to navigate their website, it has more to do with front-end development/UI-UX than their servers...
I use Walmart, Newegg and eBay used stuff and the good old Craigslist.
They also rip the poor old post office off $1.45 per package for delivery but, the post office was stupid enough to agree to it.
Very informative video
To be honest I love amazon
They do there job they bring every on time
the way she pronounced the word "inventory" at 0:40 lol
Agreed!
Thumbs up x 5,000!
Dangers of this video: Alexa almost ordered coffee for me
Wow this is some insane growth!!! I wonder what will happen to the stock in the next decade!!!!
How amazon makes money
They take YOURS. duhhhh
😂
*you give them yours
They're a business, not the government
True. In retail they put you out of business, or make you struggle.
But they also make NEW money like AWS. and advertising.
Today I learnt CNBC doesn’t consider $596M as serious money.
That was a really interesting video. I thought they would have made more money than that. A story on the most profitable companies would be really good to see.
The state-owned Saudi Oil Company (Aramco) has an easy business model that generates more profits than all of them. It makes all of these genius businessmen with complex business models go crazy.
Most of their profit comes from third party storage fees. They charge by the square inch to store products in FBA every month. They are mostly just a storage company since most products just sit and pay the rent. I've also heard reports of Amazon making fake orders which just show up at peoples house that didn't order anything. Sounds like they're just making sellers think as long as they keep products in FBA and paying storage fees, they'll eventually sell. Its basically how they enticed so many sellers around the world to agree to the fees. Think about it, economist will tell you the majority of people in our country are poor and can't even afford a $400 emergency yet Amazon would make you believe everyone is spending billions on their site. Are they really???
It all about the prices!
Simply, an amazing amazon !
The two day shipping is very convenient.
Did anyone else’s Alexa respond when they mentioned it in the video? Lol
It's all about offering exactly what the customer wants at rock bottom prices - service and value
Amazon USA is different from Amazon Global. Amazon Global offers expensive common products that can be found evyerwhere. So it’s not profitable. As a result, Amazon WS is intended to bring profits from global markets. However, AWS has many other competent competitors who provide a server that can store and process data.
Whao, what a high-performing business model
Make a video of how CNBC makes money. Would be very interesting to watch
Amazon is the new Standard Oil except they dominate all markets and not just Oil....
Yeah I guess they are if you know nothing about the history of Standard oil
*eye roll intensifies*
@@logic7374 I know that Standard Oil didn't dominate the oil market but they very profitable despite being cheap and having loads of competition hence the comparison which is what led to Standard Oil dominating the market until they were forcibly split up by the U.S. Government...
@wclifton968 -- JD Rockefeller build standard oil into a behemoth. There were no laws at the time against that.
Amazon, on the other hand, does have a LOT of competition. Lots of it.
Standard Oil started an industry, and therefore crushed it .
Big difference.
Amazon as big as Standard Oil? Lol
bitTorrenter which is bigger?
I just wanted to know how amazon manages to sell an item below max retail price and spend on packaging and delivery without taking a delivery charge :/
Amazon is buying items in bulk? Isn't Amazon just a platform between the supplier and the consumer. Then gets a commission for every sale on its platform.
Amazon also sell their own brand items, usually really good too, which they make cheaper than other brand items
Amazon monitor best sellers, find their source and in the end they order the product in bulk.
With Amazon being an internet powerhouse, I wish they would start offering affordable consumer internet service. I once read that 97 cents of every dollar is profit for Comcast's ISP.
Good video
great!
The octopus needs to have its tentacles cuts.
good video
Do their shares offer a Dividend?
Walmart and Amazon are side by side competitors now. Don't forget that. They just do it in different ways. 🎯
Nice video
Nice
Amazon is really popular here in the uk
Wow highest company
Yaa I agreed
Inflated stock value and not paying taxes
Wrong
@@leonardocaicedo1273 you're ignorant af. There's a concept of carry forward losses. They won't pay a dime of tax in '19 too
Who cares if they don't pay taxes. They add way more to small businesses all over the world.
And I love how people attack Amazon for not paying any tax but they still shop there.
Obviously they don't care enough.
@Chris Ruiz i haven't used Amazon in about 10 years. Their owner is the richest man in the world and they got a huge tax refund. They got some of my money without me even using them.
@@logic7374 you mean destroy small business. They run ecommerce at a loss since 1995. Any company can not compete with a company that is allowed to lose money. They also allow copycat items from Asia to flood their market ignoring patents
A name is worth more then a cooked burger 🍔 today
Burger 🍔 yum
Unless you're a prime member shipping can be expensive sometimes
it is offered quite often for free trials. I paind very little in shiping cost in the last couple months. and it is super quick. The money youbwould spend on shioing, buy prime and get shipping free.
Amazon just recently expanded into my country last year. (2017)
1:35 i though netflix long left
They give the post office like 1 dollar to deliver each package
What about kindle...isnt it generating profit?
One of the biggest reason I love Amazon is because I get my money back within 3 hours after dropping off my package at the UPS store. You gotta wait like 1-2 weeks with others company.
money back like a refund? that is wild.
I work Amazon Flex. I am an independent contractor. Let me tell you. I earn big bucks. I averaged $35 to $40 an hour when Amazon had restaurant delivery.
I deliver Whole Foods and regular packages. Now days since they discontinued Restaurants last summer. I work a day or two a week usually Sunday and Monday mornings. It’s not my only income. I work other jobs.
1-19-20
Best video
And now... I have coffee coming in tomarrow....
4:33 Thanks chump, my Alexa just added coffee suggestions to my order list.
We need an 'N word' version of Alexa for fools on tv.
They should connect the profits of a company with the minimum wage of its employees.. for example, if the company makes 5 bn$ the minimum wage of its employees increase by 25%... if 10 bn$ it increases by 50%,,, something like that....
Also there should be a labor union committee that check on these big companies to make sure the number of employees in a company do match the necessary requirements, and that these companies are not over-burning their employees to save unnecessary cost.
ste you a communist? sure sounds like it.
How many people with Alexa is now trying to cancel their coffee order...
It’s a good video
Please do such videos on other companies like Alphabet (Google), Apple, Microsoft, and fb.