In last Wednesday’s earnings presentation, it was a case of more of the same from Amazon, as the company continues to favour growth over profits. Amazon’s founder and CEO, Jeff Bezos, has sacrificed short-term profits in favour of investments aimed at long-term success.
Amazon Web Services Growing Fast
One of these long-term investments is Amazon Web Services (AWS), the company’s cloud storage division which is growing quickly. AWS generated $1.57 billion in Q1 2015 and is on track to generate $1 billion in profits this year.
Jeff Bezos said,
“Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating. Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon… We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. “
Amazon Revenue and Net Income Q1 2015
A look at some of Amazon’s numbers for Q1 2015.
- Revenue recorded at $22.72 billion .
- Net loss was $57 million compared to a net income of $108 million Q1 2014.
- AWS revenue came in at $1.57 billion, up 49% from last year’s figure
- AWS profits of $265 million, up from $245 million last year.
- North American net sales of $13.41 billion, up 24% from a year ago.
- International net sales of $7.75 billion, down slightly from a year ago.
- Net sales for Q2 are expected to be between $20.6 billion and $22.8 billion, or to grow between 7% and 18% compared with Q2 2014.
You will find more statistics at Statista
Boost Your Amazon Profits
Jeff may not be too interested in profits at this moment in time but if you want focus on increasing yours, here’s four quick tips to boost your Amazon sales and profits.
- Ensure you understand how shipping works and send your items as soon as you can. This will aid your chances of receiving positive feedback, repeat custom and winning a share of the much coveted Buy Box.
- Ensure you understand handling time. Handling time is the time before your product is sent out. Amazon allocate 48 hours for sellers to process orders, getting them packaged and out the door. With a small number of orders, this is manageable but may become more difficult as your business grows and for this reason, many sellers choose Fulfilment by Amazon (FBA). Check out the pros and cons of FBA.
- Keep your Order Defect Rate under 1%. If you’re using FBA, Amazon will take care of this for you. If you’re using Merchant Fulfilled Network (MFN) and want to win a share of The Buy Box (who doesn’t?!), then you should aim to keep your Order Defect Rate at 1% or lower.
- Play by the rules and avoid account suspension. You’re selling on Amazon’s platform, so you need to play by their rules. If your account gets suspended, you won’t be able to sell. If the worst-case scenario happens, here’s some helpful advice.
