![]() The potential margin benefit to be had by growing this part of the business is phenomenal. It's no accident the new group CEO currently heads up AWS. Each extra AWS sale is a lot more profitable than a retail sale because adding a customer to a virtual storage cloud takes very little effort and cost compared to a ramp up in retail orders, which requires physical space and manpower. ![]() This gives partners additional storage or computing power on demand and has attracted customers ranging from HSBC to BMW. It's since morphed into an enormous business specialising in cloud computing. 'Fulfilment by Amazon' means many of these vendors pay Amazon for warehousing and delivery - generating extra fees.īut while we all know about Amazon's retail operation, there's a far more profitable business hidden below the surface.Īmazon Web Services (AWS) was born from one individual's frustration with the limitations of Amazon' own IT infrastructure and being given the freedom to create a solution and run with it. These made up $80.4bn in sales last year and are growing faster than Amazon's own product sales. While Amazon sources and sells many of its own items, lots of the products sold on the website are actually third-party sales. It will come as no surprise that the retail business continues to go from strength-to-strength. We're particularly pleased to see another run of profits in the less mature International segment. The surge in demand has more than compensated for the enormous extra costs too, and the group's delivered another record quarterly operating profit. This core part of the business has benefited massively from lockdowns, as people are locked out of physical shops. Despite the new man at the top coming from Amazon Web Services (on which more later), investors must remember Amazon is still very much a retail operation. ![]() Amazon is his brainchild, and Bezos oversaw the world's most famous success story.īut it would be a mistake to think this marks the beginning of a totally new era. News of Jeff Bezos' departure is definitely a change to the status quo. View the latest Amazon share price and how to deal Our view The shares were unmoved in after-hours trading. He will be replaced by Andy Jassy, the current CEO of Amazon Web Services. There was a 74% increase in operating profit too, which at $6.9bn was also some way above analyst expectations.įounder and current CEO Jeff Bezos will step down as CEO and assume the position of Executive Chair from Q3 of the current financial year. Net sales rose 42% (ignoring the impact of exchange rates) to $125.6bn in the fourth quarter, comfortably ahead of what the market expected. Market closed | Prices delayed by at least 15 minutes | Switch to live prices
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