Amazon’s Yearly Revenue Breakdown by Product Category

Amazon's-Yearly-Revenue

Amazon makes its money because it does one thing quite well: diversification. That is why it has a market value of over $400 billion and the traditional retail industry, as a whole, has a market value below $300 billion.

How is Amazon able to stay in such a dominating position? Because the company is not afraid to take a risk. In 1994, it was an online bookseller online. Since then, the company has become a mobile device manufacturer, an e-book publisher, a TV and movie studio, and much more.

1) 49% of sellers make less than $100,000 per year.
About one in three sellers make up to $1 million per year on the platform. 1 in 10 sellers may earn up to $10 million. Only 2% of sellers make more than that.

2) 18% of third-party sales come in the home and kitchen categories.
Other popular categories for third-party sellers are toys and games (11%), books (9%), and health and wellness (8%).

3) Many sellers are concerned about competition on the platform.
The biggest fear of an Amazon seller is that the company will take away their selling privileges. 44% of sellers are concerned that Amazon might decide to start selling their items. Customer feedback that is negative is another top concern.

4) Sellers pay Amazon for the right to sell.
Individual sellers that move more than 40 items per month owe Amazon $0.99 per sale and any referral or closing fees that are involved in the transaction. Professional sellers owe $39.99 per month and up to 15% of the transaction.

5) Amazon is looking to the future.
Ideas that Amazon is currently pursuing include drone deliveries, traditional stores, treasure trucks, and direct in-home deliveries. Not every idea turns out to be successful, like their venture into the smartphone market, but risks must be taken to stay on top.

6) Relationships are the key to Amazon’s success.
35% of the revenue Amazon generates comes from their “bought together” and “customers who bought this item also bought” features. That type of upsell builds relationships because it makes the consumer feel like the platform understands them.

Amazon is consistently ranked at or near the top in corporate reputation and customer satisfaction. Their success is a lesson from which any business can learn something new.