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How Amazon Makes Money

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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 https://www.youtube.com/watch?v=Efs3PyR8iBw Jeff Bezos In 1999 On Amazon's Plans Before The Dotcom Crash https://www.youtube.com/watch?v=GltlJO56S1g Is Amazon HQ2 A Bad Gamble For Cities? https://www.youtube.com/watch?v=s5ouSWNQrkA Inside Amazon's New 4-Star Store https://www.youtube.com/watch?v=_lqjxVO4u5M » Subscribe to CNBC: http://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: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Amazon How Amazon Makes Money
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Text Comments (834)
YugoRr (12 hours ago)
The role of shareholders is overwhelming the stakeholders.
Light Yagami (2 days ago)
And paid no taxes lmao
Johnny S (3 days ago)
and this is why amazon will be broken down into 3-4 companies,
A Tem (8 days ago)
man, so rich.
Andrew Sturgeon (9 days ago)
No, over time , I use my Alea less and less, and forget it's there, because it has few good use cases. I'm sure if you were to measure meaningful engagement, you'd find there is little, amongst 1000's of options. Tell me when the last time ANY company discussed ANY voice enabled device as even being a channel, for any aspect of their business, beit sales, customer service, customer acquisition, etc. It's a novelty/toy. Not saying voice won't be a big deal - but until there's a killer app - forget it.
Happy Life WISH (9 days ago)
And 0 tax
이은굥 (10 days ago)
I love Amazon♥ they got everything!!!!due to Jeff Bezos' crazy customer obsession!!!
San Jones (12 days ago)
Doctron Four (12 days ago)
Maybe they’ll start paying its fulfillment employees fair wages now.
Breaking Bad (15 days ago)
Why do they send small items in big ass boxes?
David M (15 days ago)
Alexa STOP!!!
David Thierry (21 days ago)
Amazon makes money by avoiding paying taxes in countries where it makes profits. Omitting this fact is unprofessional.
Paul Hosken (21 days ago)
All this obsession about money .no concern for the kids starving around the world being abused. When god comes back the USA will vanish in a puff of smoke
Bailey Henderson (22 days ago)
Sears and kmart JCP did not take about 700 dollars loss last year they just kept going sears and kmart will become together Canada will have sears back soon slim in Mexico sears has no choice either give up the division or quit Mexico will be bashed and thrashed and beaten bloody to conform to amercian counter culture
Lucas Kwiatkowski (23 days ago)
Amazons advertising is starting to become more and more profitable. Clicks for Amazon PPC are rising at an alarming rate and poorly managed ad campaigns are continuing to make Amazon a lot of money. Now that Amazon controls more than 50% of all ecommerce sales, brands are taking ad spend from Facebook and Google to put it into Amazon.
moonstar (24 days ago)
by making everything overpriced
rampage (25 days ago)
amazon not the cheapest but you can find stuff there and not locally , free shipping is nice , but i always shop around , sometimes amazon has cheapest price
glen aldo (24 days ago)
Cheaper prices means cheaper product
Alex Voxel (27 days ago)
Amazon is providing great customer experience, that's the key!
Mario Luevanos (27 days ago)
Easy, by not paying taxes.
DON KAZ (1 month ago)
Next major step should be reducing shipping costs so we'll get it cheaper
Haks Hustle (19 days ago)
They're already working on that, Prime air, more operation centres and they've increased their investment in the transportation area as a whole which will save them billions annually and ultimately benefit both the consumer (quicker deliveries at a cheaper rate) and the business. I mean, Amazon's business model and logistics is just incredible.
quadsnipershotp1lvl4 (1 month ago)
Amazon will their get too big and fall hard or it will become a monopoly and get broken up. I like amazon for expendables like laundry detergent, and their stuff and my manga if a buy only one. But most stuff that is sold on the website is just cheap Chinese crap.
KWT (1 month ago)
most stuff on ebay are cheaper than amazon but what makes me buy from amazon is the customer service
Reece Mayer (1 month ago)
Because they dont pay taxes lol. Get real
The Philosopher (1 month ago)
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.
Guy Tero (1 month ago)
Mmmmmm sheeple. I'm sure Amazon doesn't pay any tax wherever they are in the world. And Alexa is the scariest thing to ever hit the market.
Scott Hall (1 month ago)
They give the post office like 1 dollar to deliver each package
Friedrich Siefferman (1 month ago)
Woo America
Sahil Saleem (1 month ago)
I love Amazon.
Blue Sky (1 month ago)
1:50 AWS grew 4-5 years ago? This dumb @ss. LMAO AWS has been the market leader since 2009 dude.
Abhimaneu KJ (1 month ago)
*Let's buy some Amazon stocks*
Toby and James Goldsmith (1 month ago)
Amazon is really popular here in the uk
PhillyDjHook (1 month ago)
I wish I was blessed with a brain that could think of a way for me to make money. Anyway, I DJ LIVE on YouTube but I can't save any mixes there. Subscribe to my YouTube channel and hit that ALERT bell so you'll *NEVER* miss a mix. It's an Live DJ mix show where you can make song request and I'll play it.  .
Destiny Fan (1 month ago)
There's also the deal with NSA.
David James (1 month ago)
Every American should buy some of this stock
Huseyin UNKOC (1 month ago)
Mind... blown.
Being Fooled (1 month ago)
Be realistic guys, any talented people would rather kill oneself than to be delivering goods to make a living, like this amazon guy. A doctor has to be quite talented knowing all the biology and physiology of the body and going through the bootcamp like med school and hospital training. but the doctors cannot be billionaires. if they do, they would be considered immoral that they must have stolen money from the patients or public. If delivery goods can make a decent living, let say having a salary of few hundred thousands a year, that is good enough for the kind of service they do for the society. But becoming billionaires? something must be wrong in the system allowing them to do so. theoretically, doctors should be billionaires for the kind of work they do, but why the system does not allow them to be? because they have to stick w the moral code? How about those retailors, a kind of job for people have no talent to go to med school, and they become billionaires? Are they sticking to the moral code? Are they monopolizing the market, buying the politicians, getting corporate welfare, having too much tax break etc? If the retailers dont have to follow the moral code, why should doctors. how about this? the doctors should charge their fees according to the wealth of the patient. if you are poor, doctors charges nothing or just a few cents, if you are super rich, doctors charges $50M for a simple procedure. this is the only way to be billionairs as doctors. and it seems not breaking the moral code at all.
Ray S (1 month ago)
Didn't Amazon start out as a bookstore?
yahwehsonren (1 month ago)
So Amazon zero from delivery but from webservices wow
Guyana Online Shopping (1 month ago)
Wish they went more in debt
Guyana Online Shopping (1 month ago)
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.
KingRn7 King (1 month ago)
Ever since they Laughing it in and in 2017 & 2018 Amazon become India's #1 online shopping site
Miguel Torres (1 month ago)
Selling cheap crap
The Black Shadow (1 month ago)
Amazon not paying their taxes!!!
Damien Tong (1 month ago)
Record earnings and they got over 100 million back from taxes
Chris Levesque (1 month ago)
Thanks, you just made my Echo try to buy me coffee.
Jennifer He (1 month ago)
Dangers of this video: Alexa almost ordered coffee for me
Dach ..... (1 month ago)
If amazon were a girl, i would marry her,
Football Highlights HD (1 month ago)
Make a video on how they don't pay taxes
Patel Vidhu (1 month ago)
Amazon is a great company built on best customer service. Profitability will increase because Amazon is market leader in many products.
Filipe Barbosa (1 month ago)
Not with my money.
Dhante Swha'le (1 month ago)
Unless you're a prime member shipping can be expensive sometimes
Xipo86 (1 month ago)
best company
Valentino Scopelliti (1 month ago)
Who else loves amazon?
Xipo86 (1 month ago)
@GET ME 100 SUBS PLZ Amazon is the best company
Jack Reacher (1 month ago)
I like Amazon. Amazon has great customer service.
J C (1 month ago)
I seem to do much better selling on eBay than Amazon.. stuff sells faster and overall a little less in fees.. I like how they never mentioned eBay at all in this video, like when they said you either use Amazon or go at it alone. Lol k
AaronP11 (1 month ago)
Amazon is way behind Alibaba but no one ever talks about Alibaba
Nishant Jayant Gilatar (1 month ago)
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 :/
the doge (1 month ago)
I ordered a mattress from Amazon and is really comfy, good price and free shipping. All hail Amazon huehue
NATASHA SOMMER (1 month ago)
Amazon is big in world,,.
Tampatec (1 month ago)
Very Innovative with fire TV stick, echo, Ring and sales from popular tech YouTubers.
Kiril Naydinidis (1 month ago)
Aurobindo Ghosh (1 month ago)
amazon made money after realizing just selling books don't fatten the wallet
Frank Liera (1 month ago)
Amazon should invest on better tape for their boxes. when Amazon prime boxes go through UPS hubs their cheap tape causes their heavy packages to open. so much money and such cheap tape.
Sc0rPsX (1 month ago)
Was pretty positive you were going to blame Russian bots...
Kirito Kirigaya (1 month ago)
Why would you use McDonald's as reference? Isn't it comparing oranges and apples
KHALIIL01 (1 month ago)
Still didn’t explain how Jeff Bezos made $150 billion.
Beck Stein (1 month ago)
Amazon is making robots to conquer the world.
crazieeez (1 month ago)
Amazon website looks like sheeit. So confusing. It makes me not want to shop online. Airbnb is so slow thanks to Amazon Web Service.
crazieeez (1 month ago)
Amazon website looks like sheeit. So confusing. It makes me not want to shop online. Airbnb is so slow thanks to Amazon Web Service.
MrHaterClay (1 month ago)
SquirrelyBlake (1 month ago)
The numbers aren't true. Amazon had a horrible year in 2018 and isn't doing that great this year either. Really sad to see companies go out of business due to Amazon and those still in business don't even try to compete. Stop lying with the numbers! Doesn't make you smarter.
sbasireddy19 (1 month ago)
Did Jeff Bezos make this video to flex on us?
Ramiro Garcia (1 month ago)
Anybody else feeling like Amazon is getting a little too big? They essentially have a monopoly over online sales.
Oliver Medina (1 month ago)
Sheer Volume in Shipping and Manufacturing. Also getting Grade A Buy Rates with Carriers like Fedex. USPS and UPS.
vous voulez (1 month ago)
All americans do is shopping and eating only. They are very easy people to make happy. Amazon don't need to be smart.
NZNSI Inc (1 month ago)
0:40 I've never heard "inventory" pronounced that way before
Jordan E (1 month ago)
AWS is so much overpriced compared to other cloud service data centers
mannygomez24 (1 month ago)
And still no taxes for them
Dick Plummer (1 month ago)
I rather it be Amazon than fake communist, Ali Baba baby-face.
Khurum Niaz (1 month ago)
Wait so Amazon Web services provides services to Netflix eventhough prime video is Netflix's rival
Khurum Niaz (1 month ago)
Wait so Amazon Web services provides services to Netflix eventhough prime video is Netflix's rival
Oscar Granda (1 month ago)
You guys need to check out Flowspace. Making on demand fulfillment easy. Don’t have to be dependent on Amazon anymore
Y-Travel Travel-X (1 month ago)
amazon makes crazy money i wish i boght some parts in 1999
NewsRedial (1 month ago)
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.
RICA RUE (1 month ago)
repairdrive (1 month ago)
All the "sponsored item" crap that keeps showing up more and more in the search results is REALLY getting annoying.
Tanya G Davies (1 month ago)
This info is invalid. Make a video after taxes and government investments are returned.
XRP J.T (1 month ago)
Amazon doesn't make money! They lost 100m last year! They never have been profitable!
John Smith (1 month ago)
Later on, Amazon may become the next Disney.
chief tp (1 month ago)
never used amazon. I don't get the appeal? buying something through them and paying more for it because they're another middle man? again, what's the appeal?
Fortnite Sucks ! (1 month ago)
This stupid ass made my amazon echo buy coffee
Chris evo (1 month ago)
LOLLLL when the guy said “Alexa, order more coffee” it triggered my Alexa
MossyDaMoose (1 month ago)
My Alexa went off while I was watching this video
samuraijrb (1 month ago)
Amazon doesn't need to make a profit it is a zombie company.
Tj Gsomething (1 month ago)
Amazon AWS makes so much money BECAUSE IT COSTS TOO MUCH!!!
luke7137 (1 month ago)
without watching the video, they make money by selling products at a price of profit. Simple. case closed.
Gollum (1 month ago)
FACT: Amazon doesn’t have low prices. There prices are much higher for the same product if you get it from somewhere else. Just do a price comparison the next time you buy a product. Everything is overpriced in Amazon.
Isaac Burnside (1 month ago)
Invent-ery? 👀
Nicholas Littlejohn (1 month ago)
Third party Amazon stuff sucks. So many fees and hassles.
Less Talk, More Delicious (1 month ago)
Do they sell Popeyes fried chicken though? 🍗🤤