Amazon Business Model and How does Amazon Make Money

Amazon Business Model and How does Amazon Make Money – Unicornomy Analysis

Amazon Business Model & How does Amazon Make Money
Amazon Business Model

Amazon is the one company that every startup rookie has heard of! Correction!  You can’t be a startup junkie unless you’ve heard of Amazon! aka the Grand Daddy of all E-Commerce companies in the world.  It’s the world’s largest E-Commerce Company, World’s Largest Listed E-Commerce Company.   It’s most fierce competitor in India is FlipKart.com!

You may also be Interested in Reading: Business Model of FlipKart

About Amazon, Founder, Funders and Facts

Jeff Bezos (do I say more!), used to fiddle around with the idea that some one should understand how to sell books and than he / she can start selling other things to the same set of people, because if you help some one read a book they become indebted to you and start coming back to you ever since!  I think rest is History!

Amazon is a listed company and is backed by the fiercest VC fund ever knows – Tiger Global (they have backed FlipKart as well) – On listing, Tiger stay put in the company for obvious reasons and now Lee Fixel (Currect Tiger Global Head) has Bezos backing him in case he wants to sell his Indian Portfolio to some one.  We need to first note that Amazon is one Goliath (Giant) of an organization which has stakes in multiple entities and businesses that it was a difficult task to collate all of them, go through their SEC filings etc to actually arrive on a conclusion as to what could be the way of what could be The Amazon Business Model.  We will first go through the list of companies that Amazon owns and then move on to how does Amazon make money.

Amazon’s Journey is so much of ups and downs that the mammoth that it is today deserves lot of credit.  I had read this book called “The Everything Store” before writing this post and this gave me so many insights about this company’s ethics and principles.  Do give it a read.

You may also be Interested in Reading: How does PayTM Make Money

List of Companies that Amazon Owns

  1. Amazon.com (E-Commerce) – Just like any other E-Commerce Store this makes money (Last SEC filings show that the total profit for this company was 500 Million USD)
  2. Amazon AWS (Web Servers, Cloud Solutions) – Most Profitable company for Amazon – 500 Million USD Profit (in just 2nd year of service)
  3. Amazon SES (Simple Email Service) – Bulk Email Sending and Management Solutions
  4. Pets.com – Online Pet Store
  5. Zappos.com – Bought Over as competitor, later shut donw
  6. Quidsi – Kids Apparel Store
  7. IMDB (Internet Movie Data Base) – Very Popular with TV, big Screen Community
  8. Alexa – Internet Information (Pro Accounts)
  9. Diapers.com – Kids Accessories
  10. Audible – Audio book Company (Worlds largest)
  11. Create Space – Content Management
  12. Good Reads – Book Review
  13. Woot
  14. Soap.com
  15. A9
  16. DpReview – Camera Review
  17. Shelfari
  18. AskVille
  19. LexCycle
  20. Exchange.com
  21. DrugStore.com
  22. Small Parts
  23. Fabric.com
  24. CD Now
  25. LoveFilm
  26. Amazon Prime [NetFlix Competitor – Read About NetFlix Business Model Here]
  27. Amazon Cloud Storage
  28. Amazon Fire OS
  29. Amazon Kindle / Basics
  30. Amazon Fresh
  31. and many such more

However it should be noted that not all of these companies owned by Amazon make them money, so far, Amazon.com, AWS, SES, Audible, IMDB, Alexa only have been able to make significant amount of money for Amazon, rest all, lets say, are just startups 🙂

Amazon’s Business Model is pretty simple, sell what sells, buy what gets read upon and that is why you would observe a lot of high quality domain names were the ones that were bought and especially e-tailers of all major necessities.

Amazon Business Model

Amazon’s prime business comes from E-Commerce Store Amazon.com, which contributes to the highest value of sale done by all subsidiaries put together.  The business model of amazon is pretty much similar to any other E-tailer that we can think of, check out FlipKart Business Model for further details.

Rest of them are not that significant and will be covered in individual business model analysis.

You may also be Interested in Reading: How does Jet.com Make Money

How does Amazon Make Money

Amazon makes most of its money from top 3-4 companies that it owns like AWS, SES, Store, etc.

You may also be Interested in Reading: How does Myntra Make Money

Disclaimer: The analysis of the Amazon Business Model or How does Amazon Make Money is of the Author’s himself, neither the company (Amazon Inc) or its affiliates have confirmed the same to the author and the descriptions, stats, facts and figures are either obtained through secondary web research or interrogation of the users / sellers or other resources on the web. Please use your own discretion to use this info when required and by continuing to read you agree to indemnify the author from all liability arising out of using this info on your own. 

9 Comments

  1. Nice overview – thanks!

    Amazon tends to take a long term view of making money – dominate the market first, reinvest to dominate even more (lots people read their ebooks on a Kindle reader, even if it’s on their iPhone) and generally be the 800 pound gorilla.

    As mentioned, they also offer quite a few behind-the-scenes services that are used by lots of websites to handle the day-to-day techie stuff – the kind of thing companies like Google could offer but don’t seem to. All of those help by turning a profit and cutting their own overhead so they’re win-win.

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