Amazon reported a record profit in 2018, earning $10.1 billion in net income compared with just $3 billion the prior year. Considering the company hardly recorded any profit until 2016, this sudden cash influx represents a new era for Amazon.
So what’s changed?
Despite Amazon’s dominance in e-commerce, online sales are not actually a main profit engine for the company. Instead, its cloud computing division, Amazon Web Services, has actually generated the majority of Amazon’s operating income since 2016. Profits from advertising and third-party sellers are also booming.
While Amazon has traditionally been valued based on growth over profitability, these recent earnings trends have investors reconsidering how the company should be valued today.Sharing is caring! Link to this article:
How Amazon makes money
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