How does Amazon make money? Have you been asking yourself this question? Well, many others have also been looking for genuine answers on how the most popular e-commerce business has been making money for all those years- more than 20 years since it was started.
Now, to get some firsthand information on the above question were going to discuss the various methods that generate revenue for Amazon right below here. Let’s go:
Third party sellers
On top of our list, we have third party sellers as one of Amazon`s sources of revenue, which accounts for approximately 12% of the business` total revenue. This is due to the fact that 40% of goods sold on this site are mainly through the third party sellers.
The Kindle Program
Before you read on, one thing you ought to understand is that Amazon does not make any money with Kindle Program as Jeff Bezos finally admitted. So how amazon does makes money through this program? Let’s consider this: there is a high probability of customers buying magazines, books, watching movies through the Amazon Instant Video feature. This is a top way for the site is able to undercut major competitors such as Google and Apple.
Through Media and Content
Amazon seems to have taken another path towards riches by investing heavily on original content. That is, it has invested in the publishing field and what’s more, they’re producing their own TV shows, not forgetting the “Alpha House” and “Betas”. Now, to drive more sales into its media and content category, Amazon uses the prime subscription program, which we`re going to discuss next.
Prime
Every kindle fire is bundled with one month free prime subscription, meaning that all newbies have the chance to experience the benefits such as a 2-day free shipping as well as a good number of movies and TV shows- all for free. So how does Amazon makes money through the prime program? When a user tastes the Prime, they’ll be more than convinced that subscribing to the full package at $79/year is worth it.
Amazon Web Services
Here`s another awesome revenue generator for Amazon. How does Amazon make money with its web services? Generally, the method involves Amazon renting out its formidable structure to a company that does not have time or the necessary capital to come up with its own structure- a fantastic idea there.
Bottom Line
Now you have it- the answer to you question on how does Amazon make money. It’s through these methods that Amazon has been able to enjoy massive revenue globally for a long a period of over 20 years since it was lunched. Given that the business keeps updating its methods of making money, more is expected in the coming years and consequently, its net worth will go up.
