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How Amazon Makes Its Money

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How Amazon Makes Its Money Chart

The Briefing

  • While a majority of Amazon’s revenue comes from online sales, the company has several other business segments that generate billions of dollars in revenue
  • The largest business segment following online sales is third-party selling services

How Amazon Makes Its Money

With a market cap of $1.7 trillion, Amazon is the most valuable retailer in the world. But the company has grown into more than just an online store.

Amazon is now the proud owner of multiple billion-dollar revenue streams—but what are these different business segments, and how much does each unit contribute to the company’s overall revenue mix?

Here’s a look at Amazon’s different business segments, and how much each contributed to the company’s total revenue in 2019 (which was a casual $281 billion):

Business SegmentPercent of Revenue (2019)
Online stores50.4%
Third-party seller services19.2%
Amazon Web Services (AWS)12.5%
Subscription services6.9%
Physical stores6.1%
Other5.0%

While online stores generated the highest amount of revenue at 50.4%, third-party seller services made up a significant portion as well, making up 19.2% of the total.

Third-party selling has seen significant growth over the years—in 2018, it accounted for 58% of Amazon’s gross merchandise sales, which is a vast increase compared to 2000, when it made up merely 3%.

Amazon Web Services (AWS) is the third most important revenue stream, contributing 12.5% to the overall mix. However, despite contributing a relatively small percentage to total revenue in 2019, AWS made up a large portion of Amazon’s operating income, making it the key to the company’s overall profitability.

» To learn more, read our full article on How Big Tech Makes Their Billions.

Where does this data come from?

Data was sourced from directly from Amazon’s 2019 SEC filing.

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Datastream

Beijing Bounces Back: China Posts Positive Q3 Growth Numbers

China’s economy took a massive hit in 2020 because of COVID-19, but Q2 2020 showed a speedy recovery. Here’s how the country fared in Q3.

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The Briefing

  • The Chinese economy grew by 4.9% year-on-year in the third quarter of 2020.
  • Growth for the first three quarters of 2020 is now up 0.7% from a year ago.

China Posts Positive Q3 Growth Numbers

China became the first major economy to return to its pre-virus growth trajectory, posting positive growth numbers in Q2 2020. Now, China’s National Bureau of Statistics has reported third-quarter GDP growth that is up 4.9% from a year ago.

The Road to Recovery

Like the rest of the world, China’s economy took a hit when pandemic-induced lockdowns shut down businesses and factories across the country.

However, the world’s second largest economy was one of the first to put COVID-19 restrictions in place, which could explain why it was the first major country to report growth as stores and factories began to reopen post-lockdown.

Here’s a look at China’s GDP growth in recent times:

QuarterChina GDP Annual Growth Rate
Q3 20176.9%
Q4 20176.8%
Q1 20186.9%
Q2 20186.9%
Q3 20186.7%
Q4 20186.5%
Q1 20196.4%
Q2 20196.2%
Q3 20196.0%
Q4 20196.0%
Q1 2020-6.8%
Q2 20203.2%
Q3 20204.9%

Are These Numbers Good?

Many countries around the world see China as a barometer of what post COVID-19 recovery could potentially look like, so new quarterly numbers have taken on some significance.

Not only did China show a speedy recovery—its initial bounce-back was also higher than predicted. While experts had projected a 2.4% increase between April and June, China’s National Bureau of Statistics reported a 3.2% rise.

Though the 4.9% increase reported in Q3 is good news for China, it still falls short of predictions from Chinese economists of 5.2% growth in the third quarter.

Is it an upward trajectory from here, or will China’s economy experience another dip? The experts have varying opinions, but the majority are relatively optimistic.

If China’s COVID-19 cases remain under control, it’s possible that growth is on the horizon.

Where does this data come from?

Source: National Bureau of Statistics of China
Details: This data was released on October 18th, 2020.

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The Top Struggles of Remote Workers

Despite the many benefits of working from home, remote workers have their own set of challenges. Here are the top struggles remote workers face.

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The Briefing

  • The top challenge remote workers face is unplugging from work, followed by loneliness, and communicating with coworkers.
  • Despite these challenges, 98% of remote workers wish to continue working remotely, at least some of the time.

The Top Struggles of Remote Workers

Unplugging from work can be challenging at the best of times.

But when your living room doubles as your office, it can be even harder–at least that’s the case for 22% of remote workers.

Thanks to the global pandemic, millions of workers have been sent home to work at a safe distance. While many remote workers enjoy the flexibility that comes with remote work, it doesn’t come without its drawbacks.

Here’s a ranking of the top struggles that remote workers face, according to a recent report by Buffer and AngelList:

RankChallenge% of Respondents
1Unplugging from work22%
2Loneliness19%
3Collaborating and/or communicating17%
4Distractions at home10%
5Different time zones from team8%
6Staying motivated8%
7Taking vacation time7%
8Reliable WiFi3%

The report also found that only 15% of employers paid the cost of home internet, and 21% covered the cost of a phone plan in a work-from-home situation. However, with this type of arrangement still being relatively new for most, these perks could evolve over time.

Despite the various challenges involved, 98% of remote workers would like to continue working remotely, at least some of the time, for the rest of their careers.

In short—while remote work poses its own set of struggles, the benefits outweigh the cons.

»For a more in-depth look at the topic of remote work, visit: How People and Companies Feel About Working Remotely.

Where does this data come from?

Source: The State of Remote Work Report, from Buffer and AngelList
Details: Survey results from 3,500 remote workers from across the globe.
Notes: This report was published in February of 2020 and the data was collected in November of 2019.

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