Amazon is the largest online retailer in the world. They run a marketplace on all of their websites allowing third-party sellers to sell products, totaling to 50% of total sales.
Amazon is live in the US, UK, Canada, Germany, France, Italy, Spain, Japan, India, China, and Mexico.
Read more about Amazon marketplaces.
Other sales is assumed to mostly consist of advertising (used by sellers and brands). It also includes other things like cobranded credit card agreements, but those are expected to be a minor part.
Amazon defines this as:
Includes sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements.
2014: $1.322 billion, 2015: $1.710 billion, 2016: $2.950 billion.See the chart
Amazon defines this as:
Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes electronics and general merchandise as well as media products available in both a physical and digital format, such as books, music, video, games, and software. These product sales include digital products sold on a transactional basis; digital product subscriptions that provide unlimited viewing or usage rights are included in Retail subscription services.
2014: $68.513 billion, 2015: $76.863 billion, 2016: $91.431 billion.See the chart
Amazon defines this as:
Includes annual and monthly fees associated with Amazon Prime membership, as well as audiobook, e-book, digital video, digital music, and other subscription services.
2014: $2.762 billion, 2015: $4.467 billion, 2016: $6.394 billion.See the chart
Amazon recently started reporting the number of sellers with over $100,000 in sales a year as a metric to understand the health of the marketplace.
In 2016 at least $10 billion in sales were generated from those top 100,000 sellers, however we estimate the total Gross Merchandise Volume (GMV) on Amazon is in the $50-$70 billion range.See the chart
Amazon offers free shipping for Prime customers, and for any purchases over the current minimum of $25. As Amazon Prime membership grows the number of customers paying for shipping is decreasing.
This cost can be either be viewed as a cost of doing business, or as a number Amazon needs to get under control to have any chance of sustainability.
Calculated by comparing Shipping revenue and Shipping costs.
Shipping revenue excludes amounts charged on shipping activities by third-party sellers where Amazon does not provide the fulfillment service, includes a portion of amounts earned from Amazon Prime memberships, includes amounts earned from Fulfillment by Amazon programs related to shipping services.See the chart
Shipping costs includes sortation and delivery centers and transportation costs.
Cash conversion cycle measures the lag between when companies have to pay their suppliers and when they get paid by their customers. At department store chain Macyâ€™s, itâ€™s 71 days. At the legendarily efficient Wal-Mart, 12 days. At Costco, with its limited inventory and super-fast turnover, itâ€™s just four days.
At Amazon, the cash conversion cycle was negative 24 days in 2014. That is, on average the company took in cash from customers 24 days before it paid it out to suppliers.See the chart
Days Sales Outstanding (DSO) is a standard accounting metric, defined as a measure of the average number of days that a company takes to collect revenue after a sale has been made. A low DSO value means that it takes a company fewer days to collect its accounts receivable. The formula to calculate DSO is written as: accounts receivable * (total sales/number of days).
This is caculated based on Accounts Receivable and Net Sales figures reported by Amazon.See the chart
Over time Amazon's metric has been increasing, suggesting a decrease in Amazon's ability to forecast supply and demand. High inventory velocity is key for Amazon's growth, allowing it to collect from customers before it has to pay supplies. Days Payable Outstanding (DPO) is related to this.
Days Inventory Outstanding (DIO) is a standard accounting metric, defined also as days sales of inventory, indicating how many days on average a company turns its inventory into sales. In general, a lower DIO is better. The formula to calculate DIO is written as: average inventory / (cost of sales/number of days).
This is caculated based on ending Inventory for the current and previous quarter and Cost of Sales figures reported by Amazon.See the chart
By increasing days payable Amazon is able to fund their growth using suppliers' balance.
Key for Amazon is to have high inventory velocity, meaning they can collect from customers before payments to supplies are due. Inventory velocity is shown in Days Inventory Outstanding (DIO).
Days payable outstanding (DPO) is a standard accounting metric, showing company's average payable period. Days payable outstanding tells how long it takes a company to pay its invoices. The formula to calculate DPO is written as: ending accounts payable / (cost of sales/number of days).
This is caculated based on Accounts Payable and Cost of Sales figures reported by Amazon.See the chart
Estimated based on press releases and best-guesses. Amazon Prime was announced in 2005.
Amazon Prime is a subscription service that gives customers access to free shipping, streaming items on Amazon Music and Amazon Video and other benefits for a monthly fee of $10.99 or yearly fee of $99.
Customers with Amazon Prime subscription get free two-day shipping for most products. Marketplace sellers using Fulfillment by Amazon (FBA) to warehouse their products benefit from this too as their products are also available as part of Amazon Prime shipping.
According to latest 10-K annual report, retail subscription services revenue was 2014: $2.762 billion, 2015: $4.467 billion, 2016: $6.394 billion. This was used to estimate prime members number.See the chart
Percent of worldwide units sold by marketplace sellers.
As the marketplace share rises, the opportunities for sellers rises too - Amazon overall growth is directly available to marketplace sellers.
Amazon first introduced third-party sellers back in 2000. As Brad Stone wrote in The Everything Store:
Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any piece of this flywheel, they reasoned, and it should accelerate the loop.See the chart