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Amazon: Not just an Online Store
Visualizing Amazon's Exponential Growth
Hello,
Welcome back to another edition of Trendline!
Today we are looking at Amazon’s storied history and how it became the world’s 5th largest company.
Lets dive in!
Chart of the Week
Amazon's Meteoric Rise: More Than Just an Online Store
Amazon was founded by Jeff Bezos in 1994.
At the end of 1995 Amazon’s revenue was just $500K. In 2022, Amazon clocked ~$514 Billion in revenue! Thats an annualized growth of 64% over 28 years!
If you've ever wondered how Amazon transformed itself from an online bookstore to the behemoth it is today, the timeline chart above offers a fascinating glimpse.
In true compounding fashion, most of Amazon’s revenue comes in the last 10 years. However, the seeds of its growth were sown much earlier.
Amazon's trajectory is punctuated with strategic innovations and expansions:
The 1996 IPO wasn't just about raising funds. It was a statement of ambition. Infact Amazon IPO’d much earlier in its journey, and at a much smaller scale than most companies do today.
In 2000, Amazon launched its marketplace business, allowing 3rd party sellers to sell on its platform. Today, 23% of its revenue comes from services offered to these 3rd party sellers.
Noticing that customers hated paying for shipping, in 2005, Amazon launched Prime - then a subscription for 2-day shipping. Infact, Prime was considered so important to Amazon that Bezos made sure it was given the highest priority in the company - Prime went from idea to launch in just 6 weeks!
The 2006 launch of Amazon Web Services (AWS) was a masterstroke, turning its internal cost center into a revenue driver. Today, AWS isn't just a significant revenue driver (16%), it powers vast swathes of the internet, from startups to Fortune 500 companies.
And who can forget the 2017 acquisition of Whole Foods? It signaled Amazon's foray into physical retail, challenging traditional grocery chains. Today Amazon makes more than $20 Billion revenue annually from physical stores.
But what's truly interesting is how Amazon has continually reinvented its core business. While it began as an online store, today's revenue tells a story of diversification. Online stores is less than 45% of total revenue, and 6 other separate businesses power the rest of its empire.
Advertising on Amazon is its most recent revenue driver. Once primarily a domain for Google and Facebook, Amazon has carved out a lucrative slice of the digital advertising pie, capitalizing on its vast user base and e-commerce insights. Its now the 3rd largest Digital Advertising company.
In essence, the Amazon story is not just about selling products. It's about understanding customer needs, leveraging technology, and constantly evolving.
As we look at this journey, it's a reminder that in the world of business, standing still is not an option.
More Charts and Stories on Amazon
Enjoyed this post? Here are some popular charts and stories on Amazon from previous editions:
Business Quiz
Here is the question for this week’s quiz.
You can simply scroll to the bottom of the post to see the answer. (Remember to answer the question first 😃
Which Big Tech company spent the most on R&D (Research & Development) in 2022 |
Before you go
What did you think of today's post? |
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Answer to the business quiz question is Amazon, by a long margin! (Source)
That’s all for this week. Thanks for reading! 👋
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