How Big is Amazon, Really?

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Amazon.com’s name is well-chosen. The word “Amazon” has come to be associated with large size, and to say that this online company is big would be an understatement. From the number of markets they serve to the number of items, number and size of fulfillment warehouses, etc. — most everything about Amazon.com is BIG, even behemoth.

Amazon.com: The Company

Revenue by Year

Amazon sales revenue has grown steadily lately, despite the thin profit margins the company is known to operate on. Here are some numbers for 2008-2012 (fiscal year Jan-Dec).

  • 2008: $19.17B sales/ revenue, $4.10B gross income, +$645M net income
  • 2009: $24.51B sales/ revenue, $5.31B gross income, +$902M net income
  • 2010: $34.20B sales/ revenue, $7.64B gross income, +$1.15B net income
  • 2011: $48.08B sales/ revenue, $10.79B gross income, +$631M net income
  • 2012: $61.09B sales/ revenue, $14.96B gross income, -$39M net income (loss)

In addition, the expected sales/ revenue for 2013 was estimated at $75B. For Q2 and Q3 2013, here are the financials:

  • $15.70B is the Q2’13 revenue.
  • $7M was the loss for Q2’13 — about $0.02 loss per share, compared to analyst estimates for $0.05 earnings per share.
  • $17.1B is the Q3’13 revenue — 24% higher than Q2’13.
  • $41M was the net loss for Q3.

Despite these losses, 30% is the company’s expected CAGR (Compound Annual Growth Rate) for the global cloud computing market for 2015-2020.

General Amazon.com Facts and Figures

Some general facts about the company:

  • 50 fulfillment centers in the U.S., with more being built — some with 1.2M square feet of floor space.
  • A look at the bottom of their web page indicates operations in 12 markets besides the USA: Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Spain, United Kingdom.
  • The main Amazon.com site, at the time of writing, had links to 29 other websites serving various markets — either as a division of Amazon, or as a partner the Amazon had invested in.
  • 20,000+ retail outlets selling Kindle devices.
  • # of employees: stayed under 20K from 2005-8; is over 80K in 2012
  • Around 97K full- and part-time employees as of Q2’13 report in Jul 2013 — an increase of 40% from the same time in 2012.
  • Employee stock options vest later than for other companies, with 5% paid at the end of the first year, 15% in the 2nd year, 20% every six months in the last 2 years.
  • Employees in Seattle get free transit cards for all-you-can-ride use, or get reimbursed $180 of the $220 monthly that parking costs in South Lake Union. However, this was not always the case, especially in the 1990s.
  • Avg salary for Amazon warehouse Associate employe: $23,852.
  • Employee retention is the lowest compared to several other Fortune 500 companies (based on surveys of 250K employees).

Here’s how Amazon fares in “median employee tenure” in years (i.e., how long the average employee sticks around):

  • Amazon: 1.0
  • Google: 1.1
  • EBay: 1.9
  • Yahoo!: 2.4
  • Wal-Mart: 3.3
  • Microsoft: 4.0
  • Intel: 4.3
  • HP: 5.2
  • IBM: 6.4

Amazon vs the Competition

Amazon has repeatedly used their online market power and capital to force their competition to be bought or give up by pricing items with little or sometimes zero margin. They’ve occasionally even tried to fight the government, re online sales tax.

  • Amazon acquired Zappos in 2009.
  • Amazon’s pricing bots changed item prices to compete with companies such as Quidsi’s Diapers.com, reducing items as much as 30%.
  • Amazon was willing to lose $100M over 3 months to beat Quidsi.
  • Amazon was originally willing to drop business online in multiple states to avoid collecting sales tax for online purchases.
  • In addition to owning a number of entertainment-related websites, Amazon decided to start producing television shows. In Apr 2013, they introduced 14 new TV pilots, then solicited customer feedback to decide which of those shows to make into full series. All the better to stock Kindles with video content, maybe?

 

Jeff Bezos: The Power of an Entrepreneurial Titan

Amazon has made Jeff Bezos, founder and CEO, a powerful man. In fact, he made it to the top of Vanity Fair’s 2013 Power List:

  1. Jeff Bezos (Amazon)
  2. Larry Page and Sergey Brin (Google)
  3. Tim Cook and Jonny Ive (Apple)
  4. Mark Zuckerberg (Facebook)
  5. Elon Musk (Tesla, Space X)

In addition to being an entrepreneur, he’s also a philanthropist, with his extracurricular activities sometimes intersecting both categories. Here are a few things Bezos has done with his own money:

  • Bezos spearheaded a project to recover Apollo rocket engines from the bottom of the Atlantic Ocean.
  • Not surprisingly, he also owns a stake in a rocket company.
  • Owned a small stake in a 3D printing company, MakerBot, that sold in Jun 2013 for $400M.
  • Had a 10,000 year clock built — 500 feet under a Texas mountain.
  • Bought the Washington Post newspaper.
  • Various other personal investments and contributions to philanthropic ventures.

Bezos recently reached into his own wallet and bought a newspaper. Here are some details regarding the Post, Amazon, and Bezo’s personal finances.

  • $250M is what Bezos paid for the Washington Post newspaper in Oct 2013.
  • 1 million Amazon shares is what Jeff Bezos sold shortly after the Washington Post purchase.
  • $270M is approximately what those shares will bring Bezos, after taxes.
  • $350/share was surpassed by Amazon stock around the time of the Post purchase, making Bezos net worth around $33B — mostly due to share ownership.
  • 85M shares is roughly what Bezos is left with — about 18.5% ownership.
  • $398.08/share is the approximate time-of-writing Amazon share price, with analyst expectations of $400/share (based on the current shares, which split several times since 1998).
  • $500M is roughly what Bezos will take home in his wallet in 2013 (including his net take from the million shares sold).

 
Amazon

References

Information for this article was collected from the following pages and web sites:

  1. http://www.businessweek.com/
  2. http://www.forbes.com/sites/briansolomon/2013/11/06/jeff-bezos-sells-1-million-amazon-shares-pocketing-over-250-million-after-washington-post-splurge/
  3. http://www.marketwatch.com/investing/stock/amzn/financials
  4. http://seekingalpha.com/article/1047141-amazon-history-tells-us-that-shorts-will-be-rewarded