How Amazon Makes Money

Рет қаралды 2,220,028

5 жыл бұрын

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.
For more on Amazon check out the following videos:
As Amazon Air Expands, FedEx And UPS May Suffer
• As Amazon Air Expands,...
Jeff Bezos In 1999 On Amazon's Plans Before The Dotcom Crash
• Jeff Bezos In 1999 On ...
Is Amazon HQ2 A Bad Gamble For Cities?
• Is Amazon HQ2 A Bad Ga...
Inside Amazon's New 4-Star Store
• Inside Amazon's New 4-...
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Google+: cnb.cx/PlusCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
#CNBC
#Amazon
How Amazon Makes Money

Пікірлер: 862

@burd7455 5 жыл бұрын

Basically, Amazon wants to be everything.

@ADEehrh 5 жыл бұрын

Once upon a time Sears was that. Then once the founders died; the people who took over control SCEWED the business! Hart-breaking!

@tylergibson3093 5 жыл бұрын

Burd duh

@nadeemshaikh7863 5 жыл бұрын

That's not gonna work outside of US though. Regulators are sensible everywhere except in the US.

@Boxhead42 5 жыл бұрын

A--->Z

@QuietStormX 5 жыл бұрын

Nothing wrong with that! ;-)

@xuimod 5 жыл бұрын

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.

@TeamDaniellomholt 5 жыл бұрын

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

@lewiskelly14 5 жыл бұрын

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

@jayz4evr 5 жыл бұрын

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

@jasonRhawt 5 жыл бұрын

can easily refund anything for ez scams

@user-xd4sk4pk7h 5 жыл бұрын

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

@balls4calls461 5 жыл бұрын

Amazon's growth is due to the global market breakout in service esp marketing and advertising...what a success story!

@tylergibson3093 5 жыл бұрын

Matthew Penjueli more than that tho

@michaelc5019 5 жыл бұрын

Matthew Penjueli Amazon was able to meet the e-commerce demand and compete in pricing as well.

@jon-unicorn-doxxer 5 жыл бұрын

@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...

@easonchan3063 7 ай бұрын

kesshav

@janiceulaayuangnatuk4708 5 жыл бұрын

They probably made 1 billion dollars alone from northern Canadians because they charge $300 for shipping!

@KrikitKaos 5 жыл бұрын

They charge $300 because you live in the middle of nowhere and it costs them $298 to get it to you.

@MrNowayjose1 5 жыл бұрын

@@KrikitKaos Dog sleds

@janiceulaayuangnatuk4708 5 жыл бұрын

And the northern Canadians aren’t even 60000 people lol

@jasinbiggs7189 5 жыл бұрын

Rural people are the stupidest. They live in a expensive place with no jobs and they expect jobs to come to them.

@ResortDog 5 жыл бұрын

@@jasinbiggs7189 No, we live where the food grows and given the choice id eat before id get paid.

@Hemiram93 5 жыл бұрын

This dude Mark Mahaney just ordered me coffee off my alexa while I was watching this video

@digi63 5 жыл бұрын

Mine too

@arbaz79 5 жыл бұрын

Does Alexa make coffee?

@drazgul9403 5 жыл бұрын

LOL Sneaky way of Amazon

@Lombok197 5 жыл бұрын

Lol

@jankomirovic2866 5 жыл бұрын

Sue him

@supersoslox 5 жыл бұрын

I am surprised that Amazon does not make most of it's money from e-commerce

@glenaldo7816 5 жыл бұрын

i see alot of those returns, and i mean alot.

@8DeaD7 4 жыл бұрын

@@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

@zusiphesikayi2390 3 жыл бұрын

@@NotYourAverageTrucker having worked at an Amazon warehouse I can tell you that the company looses billions due to returns and theft.

@firmman4505 3 жыл бұрын

@@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?

@sallydavies9253 3 жыл бұрын

Cant shipping so cheap impossible to.

@vashawnmoseley4201 5 жыл бұрын

Moral of the story, you should have bought amazon stock in the 1990's. You would have been sitting so pretty now.

@yoyu2567 3 жыл бұрын

Or even at the time you commented this

@vasiavisilievic1873 2 жыл бұрын

Thanks a lot Sherlok

@c87kim 5 жыл бұрын

LOLLLL when the guy said “Alexa, order more coffee” it triggered my Alexa

@KylePapili 5 жыл бұрын

Anyone else's Alexa go off while watching this video?

@tylergibson3093 5 жыл бұрын

Kyle Papili the fact y’all still fw Alexa in anything is a joke

@shohamdas 5 жыл бұрын

@@Chris-rg6nm she?

@patrioticbat 5 жыл бұрын

@@shohamdas Stop

@digi63 5 жыл бұрын

Mine ordered coffee at 4:35

@hearthealthyhustlebyjonath7414 5 жыл бұрын

haha scary!

@glendmaatita4936 3 жыл бұрын

while watching this video, Jeff earned 3 year of my salary

@TampaTec 5 жыл бұрын

Very Innovative with fire TV stick, echo, Ring and sales from popular tech KZfaqrs.

@ttp_007 5 жыл бұрын

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.

@BenKlassen1 5 жыл бұрын

Just like the game "Monopoly."

@EarlSquirrelsonn 5 жыл бұрын

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.

@fiiiig 5 жыл бұрын

These interviews were taken place a few buildings away from me at Salesforce tower. I love it!

@The_General_Zubas 5 жыл бұрын

Very In Depth. Thanks.

@kkacilane 5 жыл бұрын

My Alexa just added coffee to my amazon list. I don't even really drink coffee.

@8DeaD7 4 жыл бұрын

How do you even manage Alexa, if you live in a house with somebody called Alexa? lol xD

@matts_rantz4982 5 жыл бұрын

Amazon is getting closer to being able to buy Walmart. 🤣

@ancientkid1635 4 жыл бұрын

SIKE

@manujohn99 4 жыл бұрын

@@ancientkid1635 Dude...........are you kidding me??? Walmart is actually 25 times bigger than Amazon

@manujohn99 4 жыл бұрын

@MattS_RANTZ49 Dude...........are you kidding me??? Walmart is actually 25 times bigger than Amazon

@aceshadowins1310 4 жыл бұрын

Dude.....are you kidding me??? Walmart is like 25 times bigger than Amazon.

@manujohn99 4 жыл бұрын

@@aceshadowins1310 Yaa Walmart is 25 times much bigger than whole of Amazon put together

@Courtney1992 5 жыл бұрын

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.

@Rugbystu14 4 жыл бұрын

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.

@sidibouchrit 5 жыл бұрын

AWS will soon have a lot of competition

@Moneybagzzz 5 жыл бұрын

elaborate

@sidibouchrit 5 жыл бұрын

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 !

@kal_jorEl 5 жыл бұрын

It already does, Microsoft Azure earned more then Amazon on last quarter of 2018.

@Greatshow09 5 жыл бұрын

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

@ancientkid1635 4 жыл бұрын

AZURE >AWS

@Log1cTech 5 жыл бұрын

CNBC is doing some great work with these videos

@jaisarda8484 3 жыл бұрын

5:00 Growing at 20% is impossible... COVID-19 has joined the chat

@Jebusankel 5 жыл бұрын

My Alexa picked up on when he said "Alexa order coffee"

@pranavjain2747 3 жыл бұрын

This was very informative! It would be really great if this video could be brought upto date.

@AlexVoxel 5 жыл бұрын

Amazon is providing great customer experience, that's the key!

@loveanimals-0197 5 жыл бұрын

Well done CNBC. You've started making good videos without the annoying subscribe lady at the end. Very professional, finally.

@pinBin25 5 жыл бұрын

Great episode. Thanks guys!

@chrislevesque670 5 жыл бұрын

Thanks, you just made my Echo try to buy me coffee.

@realvaibhavpalsingh 5 жыл бұрын

Amazon will rule the world in more upcoming years.

@Nishith8 5 жыл бұрын

Only North America not whole world

@ArthurKnight1899 5 жыл бұрын

along with Disney

@AndrewSuaste 5 жыл бұрын

Arkham Assassin boi if you don’t

@realvaibhavpalsingh 5 жыл бұрын

@@AndrewSuaste Star generating profits.

@RealManasBose 5 жыл бұрын

Not in Asia

@dafo446 5 жыл бұрын

4:33 NO ALEXA don't order more coffee xD

@internetandlifehacks 2 жыл бұрын

Thanks for the info!

@masterharshalshah 3 жыл бұрын

CNBC producing amazing content

@gulfbreezeproper 3 жыл бұрын

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???

@rubelnasir2438 2 жыл бұрын

Great ideas from great man

@KabzieMusic 5 жыл бұрын

Today I learnt CNBC doesn’t consider $596M as serious money.

@thomaswalton4262 4 жыл бұрын

@4:33 this guy actually ordered coffee on my Amazon account because Alexa heard it....I'm not even mad about it. 😂

@larrymorgan747 5 жыл бұрын

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.

@bharat.maharshi 3 жыл бұрын

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. 🙏

@flisfinance5680 3 жыл бұрын

Wow this is some insane growth!!! I wonder what will happen to the stock in the next decade!!!!

@GamingTimePro 5 жыл бұрын

4:34 how many of y’all’s Alexa just went off...

@PetarEconomics 5 жыл бұрын

Hot damn, that was a super interesting video, thanks!

@wclifton968gameplaystutorials 5 жыл бұрын

Amazon is the new Standard Oil except they dominate all markets and not just Oil....

@logic7374 5 жыл бұрын

Yeah I guess they are if you know nothing about the history of Standard oil *eye roll intensifies*

@wclifton968gameplaystutorials 5 жыл бұрын

@@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...

@logic7374 5 жыл бұрын

@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.

@bitTorrenter 5 жыл бұрын

Amazon as big as Standard Oil? Lol

@Stoneface_ 4 жыл бұрын

bitTorrenter which is bigger?

@sunriver3946 5 жыл бұрын

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.

@jRh0121 5 жыл бұрын

Dangers of this video: Alexa almost ordered coffee for me

@4itabd 5 жыл бұрын

So informative.

@elmirajackson693 5 жыл бұрын

To be honest I love amazon They do there job they bring every on time

@SHARANJITBAINS 2 жыл бұрын

I see amazon vans in my area often but never see them actually delivering any parcel.

@sudevvs1004 4 жыл бұрын

This video is very helpful

@AdityaSingh-oe7bz 5 жыл бұрын

flipkart left the chat

@snow-rm3jx 5 жыл бұрын

Haha

@bharatrajput3145 5 жыл бұрын

Indian spotted

@arunpaudel9261 4 жыл бұрын

🤣🤣

@joyalmartinbenny8183 5 жыл бұрын

Very informative video

@SouthernBelleReviews 4 жыл бұрын

Walmart and Amazon are side by side competitors now. Don't forget that. They just do it in different ways. 🎯

@dulynoted2427 5 жыл бұрын

Try and buy something online, without going directly through a store. What avenue do you find?

@busukevm8288 5 жыл бұрын

Airbnb spends a bunch on web servers yet their website is pretty bad.

@TheRusschannel 5 жыл бұрын

and this is an Amazon video?

@Nishith8 5 жыл бұрын

Amazon's own website is pretty bad

@jonathantan2469 5 жыл бұрын

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...

@myho2260 2 жыл бұрын

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%)

@pradeeppanwar62 4 жыл бұрын

Simply, an amazing amazon !

@obey2dmax 5 жыл бұрын

Sheer Volume in Shipping and Manufacturing. Also getting Grade A Buy Rates with Carriers like Fedex. USPS and UPS.

@AmericanPride1234 4 жыл бұрын

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

@nznsi 5 жыл бұрын

0:40 I've never heard "inventory" pronounced that way before

@hermanl920 3 жыл бұрын

Neither have I! Thumbs up x 5,000! I was hoping someone posted a comment about that!

@biplopreza4611 2 жыл бұрын

Good video

@jonny5777 5 жыл бұрын

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.

@KBS_ar 2 жыл бұрын

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.

@sobujblancebd9379 2 жыл бұрын

good video

@WhatThisVideo-WTv 5 жыл бұрын

While watching this I checked the status of my parcels in transit by Amazon :-D

@tnndll4294 4 жыл бұрын

I really hate the repeated Dubai commercials. and the Bloomberg ones.

@nazmulpalash8189 2 жыл бұрын

Nice video

@george42498 5 жыл бұрын

It all about the prices!

@jvhousing5576 4 жыл бұрын

Whao, what a high-performing business model

@shabanaparveen8415 3 жыл бұрын

Nice

@TheBoxingNinja 5 жыл бұрын

This makes no sense. Whenever I hear people try to explain Amazon, they usually makes no sense.

@gulfbreezeproper 3 жыл бұрын

I sold bath soap on Amazon for $7 a bar and Amazon was keeping $5.30 of every sale, based on this, your figures of percentage they take are way off. The soap bars, the decorative cartons and the damage free corrugated boxes and outer bar code stickers and tape for each bar cost me $3.25. As you can see, Amazon is an unsustainable place to sell small merchandise like bath soap since Amazon was keeping all my profit. They were also charging me $60 per month to keep my soaps in FBA warehouses. How long do you think sellers will continue to pay these costs to sell stuff on Amazon? One only has to ask, since Amazon was providing the customer free shipping and only taking in $5.30 per soap bar, where's their profit coming from after paying for a box, labor and postage? Their profits are coming from storage fees; not sales! My profits were negative and I went in debt.

@sk8queen 4 жыл бұрын

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.

@johnmacasinag3996 5 жыл бұрын

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.

@faust7756 5 жыл бұрын

Amazon also sell their own brand items, usually really good too, which they make cheaper than other brand items

@pepsilight7324 5 жыл бұрын

Amazon monitor best sellers, find their source and in the end they order the product in bulk.

@Dahmer_Jeff 5 жыл бұрын

How amazon makes money They take YOURS. duhhhh

@younglee4879 5 жыл бұрын

😂

@TJ-oo5mx 4 жыл бұрын

*you give them yours They're a business, not the government

@tnndll4294 4 жыл бұрын

True. In retail they put you out of business, or make you struggle. But they also make NEW money like AWS. and advertising.

@octowboy 5 жыл бұрын

How many people with Alexa is now trying to cancel their coffee order...

@doubleastocktrading 5 жыл бұрын

Did anyone else’s Alexa respond when they mentioned it in the video? Lol

@RADsLife 5 жыл бұрын

Does anyone else hear the slight beeping / speaker peaking in their interviewees clips?

@chip178 5 жыл бұрын

Yes

@davel746 5 жыл бұрын

And now... I have coffee coming in tomarrow....

@nishantgilatar 5 жыл бұрын

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 :/

@blancherogers4099 2 жыл бұрын

great!

@map3792 3 жыл бұрын

Make a video of how CNBC makes money. Would be very interesting to watch

@supersoslox 5 жыл бұрын

If Amazon increases the price of Amazon Prime, their profits will increase greatly

@andreyv1 5 жыл бұрын

uhh they recently increased it. not again pls

@NR-rv8rz 5 жыл бұрын

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.

@moviedude22 5 жыл бұрын

Do their shares offer a Dividend?

@Metsfan1986 4 жыл бұрын

I use ebay and Amazon a ton. But the Sales tax law in my state starting this year has killed some deals on ebay for sure. For everyday items, Amazon is preferable option now.

@bhushan326 3 жыл бұрын

India loves amazon so much 💛💛💛💛

@Pro1er 5 жыл бұрын

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.

@MisfitPhobia 5 жыл бұрын

I like Amazon. Amazon has great customer service.

@billybob-hv5hl 5 жыл бұрын

Inflated stock value and not paying taxes

@andy_182 5 жыл бұрын

Wrong

@pratikmodi21 5 жыл бұрын

@@leonardocaicedo1273 you're ignorant af. There's a concept of carry forward losses. They won't pay a dime of tax in '19 too

@logic7374 5 жыл бұрын

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.

@savagedragon79 5 жыл бұрын

@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.

@billybob-hv5hl 5 жыл бұрын

@@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

@nadeemshaikh7863 5 жыл бұрын

Please do such videos on other companies like Alphabet (Google), Apple, Microsoft, and fb.

@seize3 5 жыл бұрын

Very interesting. The thing that most people know them for (ecommerce) is not what they make money on. Rather, it's their web services, something most people don't know them for

@KeepIt-hy8oo 4 жыл бұрын

The two day shipping is very convenient.

@alonzomartii 5 жыл бұрын

I use Walmart, Newegg and eBay used stuff and the good old Craigslist.

@thephilosopher4719 5 жыл бұрын

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.

@codorin 3 жыл бұрын

ste you a communist? sure sounds like it.