Statistics Regarding Users
- 1st quarter of 2013: 209M
- 1st quarter of 2014: 244M
- 1st quarter of 2015: 278M
- 1st quarter of 2016: 310M
Amazon has been steadily growing since it started and topped the 300 million users for the first time in the fourth quarter of 2015 with 304 million.
Amazon was begun in 1994 in Bellevue, Washington by Jeff Bezos. Even from the early days when the site sold books only, the focus was on building community. Bezos developed a feature where users could leave their own book reviews. Just three years later, Amazon.com went public with an initial offering of $18 but grew to $24 per share by the end of the first day.
That same year, Amazon transitioned from selling only books by adding music and movies. In 1998, the company became an international business with websites in both Germany and the UK. By 1999, Jeff Bezos was being recognized for his innovation as Time Magazine hailed him Person of the Year. Today, the company has more than 21,000 employees around the world while the headquarters are based in Seattle, Washington.
Amazon credits much of its success to being a customer-centric company. The focus has always been on providing the best customer service and giving users what they want. From the start, Bezos had the recipe for success. The company sold books to customers in all 50 states by the end of the first month of launching. It had also shipped to 45 countries.
Even from the start, Bezos realized the importance of meeting customer demands. Employees worked long hours, and sometimes even slept in their vehicles so they could work early in the morning to late at night.
The diligence and focus on customers have paid off. The company ranked #1 in the 2017 American Customer Satisfaction Index and #1 for the 2017 Corporate Reputation Harris Poll. Loyalty has been essential for the success of Amazon as well with 35 percent of the revenue coming from the Frequently Bought Together and Customers Who Bought This Item Also Bought features.
Prime vs. Non-Prime Members
One of the ways you can differentiate the types of users on Amazon is whether they are Prime members. Amazon Prime is a subscription service that was launched in 2005. It offered two-day shipping for free and cost $79 per year.
Prime membership has changed over the years as the following timeline shows:
- February 2011 – Members can enjoy movies and TV shows for free
- March 2014 – Membership fee increases to $99
- April 2014 – Prime Pantry is added for non-perishable items at a flat fee
- June 2014 – Prime Music is added with free access to songs and playlists
- November 2014 – Prime Photos allows unlimited storage
- December 2014 – Prime Now provides two-hour delivery in New York City and later 32 metropolitan cities
- May 2015 – Free same-day and one-day delivery in certain areas
- October 2016 – Prime Reading provides unlimited access to books and magazines
- June 2017 – Prime Wardrobe where members can try on clothing and accessories before purchasing them
- October 2017 – Amazon Key allows Prime members to receive drop-off delivery in homes, which expanded to vehicles in April 2018
- April 2018 – Membership fee went up to $119 per year
Amazon Prime has been a key reason for the success of the company. In July 2015, Amazon created Prime Day to celebrate the 20th anniversary of this feature. It came with deals for members and had sales comparable to Black Friday.
The following year for the second Prime Day, orders were up over 60 percent from the first event. In 2017, Prime Day achieved record sales – even over Black Friday and Cyber Monday.
The number of Prime members is steadily increasing.
- 2015 – 41 million
- 2017 – 80 million
- 2018 – 100 million
So, what do you get today if you sign up for Amazon Prime? Here’s a look at the benefits you are probably aware of along with some other perks you may not know about.
- Free two-day shipping throughout the contiguous US
- Free same-day delivery in certain areas
- Prime Pantry with unlimited free shipping on orders above $40
- Prime Now delivery in one hour in select cities
- 20 percent off diapers from Subscribe & Save and 15 percent off certain products in the baby registry
- 30-minute early access to special Lightning Deals with Prime Early Access
- $10 credits on pre-orders of specific video games
- Free book every month from certain picks with Kindle First
- Kid-friendly content for only $2.99 with FreeTime Unlimited
- Discounted prices and other savings at Whole Foods
- Earn 5 percent cashback with purchases on Amazon.com along with 2 percent with other purchases with the Amazon Reward Visa Card
- Unlimited streaming of movies and TV shows with Prime Video
- Unlimited access to numerous Prime Playlists and songs with Prime Music
- Unlimited storage of photos and videos with Prime Photos
- Access to books in the US for members of the Kindle Owners’ Lending Library
- Add streaming video from third parties to keep everything in one place with video add-on subscriptions
- Free games with Twitch Prime
With the addition of monthly subscription payments, more people are finding Amazon Prime to be a valuable asset for those who shop or enjoy entertainment online.
How much money do Prime members spend over non-Prime members?
Statistics show that Prime members spent an average of $1300 in a year as compared to $700 for non-members. The number went up to $1400 in 2018.
Almost half at 46 percent buy something each week, which contrasts with only 13 percent of those who are not members of Prime.
- Daily purchases – 6% Prime members, but 1% non-Prime members
- Two or more times per week – 18% Prime members vs. 3% non-Prime members
- Once a week – 22% Prime members over 9% for non-Prime
- Once every two weeks – 26% Prime members and 16% non-Prime
- Once a month – 20% Prime over 32% non-Prime
- Less than once a month – 8% Prime over 39% non-Prime
These statistics show that people who become Prime members take advantage of their benefits on a more frequent basis. While free shipping is the catalyst that drives new memberships in the US, Prime Video is the appealing factor for those in Japan, the UK, and Germany.
Information about Users
It’s interesting to note who uses Amazon and even more specifically, Amazon Prime. According to statistics, 30 percent of online shoppers in 2016 used Amazon Prime. The main reason was to get the free two-day shipping. In fact, 78 percent of members signed up because of the free shipping.
- 16% of Generation X are members of Amazon Prime
- 11% of Baby Boomers are members of Amazon Prime
- 19% of Millennials are members of Amazon Prime
- 70% of those who shop on Amazon are on their smartphones
- Amazon had 80 million unique visitors each month in 2016
- 43% of teenagers name Amazon as the favorite online shopping site in 2018
During that year, the amount of money spent by consumers was broken down as follows:
- Electronics – $15.8 billion
- Books – $9 billion
- Grocery, health, and beauty – $5.6 billion
- Automotive – $496 million
- Toys, kids, and baby – $2.2 billion
- Apparel, shoes, and jewelry – $5.2 billion
- Sports – $2.4 billion
- Office products – $1.9 billion
- Home, garden, and tools – $5.6 billion
- Movies, music, and games – $3.6 billion
Amazon plays an important role in the needs of users. In fact, they have come to rely on the convenience and selection of products that Amazon provides.
- 51% of users expected to do all of their holiday shopping in 2017 through Amazon
- More than one-third of money spend on Black Friday 2017 went to Amazon
- 40% of Amazon prime members will spend at least $1000
- 72% of all users will spend between $100 and $500 with Amazon each year
One of the reasons for Amazon’s success is its diversity. This factor is seen nowhere more clearly than with the devices the company has developed. For example, the Echo with Alexa is one of the best-selling devices for Amazon. It can control more than 4,000 home gadgets and features more than 30,000 skills.
Amazon Prime is not the only way people can save money. Amazon accepts those who are on government assistance. The company also has Prime Student which allows a 50 percent discount for membership to Prime when the person is still in school. It also provides discounts on textbooks.
Amazon Prime Reload is a rewards program that provides 2 percent cashback if they use a personal debit card to reload the balance on their Amazon account.
The Power of Amazon
Amazon is almost synonymous with online shopping today. In fact, one study showed that 44 percent of online shoppers went to Amazon first for an item they were looking to purchase in 2015. This figure is up from 30 percent in 2012.
People are busy and on the go. They use their smartphone or tablet to make purchases. Almost 70 percent of customers used a mobile device in 2015 to make purchases for the holiday season. Another survey showed that 51 percent expected to do the majority of their holiday shopping with Amazon. This compares to just 16 percent who named Wal-Mart as their primary holiday store and 3 percent for Target.
Last year, statistics show that 9 out of 10 consumers will go to Amazon to check the price on a product. In fact, 55 percent start with Amazon rather than using Google when searching for a product.
It may seem like everything Amazon touches turns to gold, but this is not always the case. In fact, some of the ideas Bezos has developed have proven not to be successful. For instance, there was Block View, which was an early and quite different version of Google’s Street View. The Amazon Fire phone didn’t fare well either, but other technology like the Kindle more than made up for any misses.
The other part of what makes Amazon successful besides bringing in more and more buyers is having the number of sellers increase. Some interesting stats on how sellers are doing with Amazon:
- 2.5 million sellers with products on the site
- 24,000 sellers have $1 million in sales
- 200,000 sellers have at least $100,000 in sales
- 50,000 sellers have $500,000 in sales
- 386,649 new sellers joined by May 1, 2019, with an average of 3,093 per day
What are these sellers selling? Statistics show how Amazon has fared in different countries with the number of products for sale for January 2018:
- US – 564.05M
- Germany – 389.45M
- UK – 370.81M
- France – 309.65M
- Japan – 260.12M
- Italy – 257.40M
- Spain – 240.12M
- Canada – 180.19M
- India – 168.85M
- Mexico – 67.61M
- Brazil – 35.24M
- China – 25.34M
- Australia – 24.72M
- Netherlands – 6.37M
In April 2019, Amazon had a total of 119,928,851 products with 44 million being books and electronics coming in second with 10 million.
There are more than 5 million sellers across all of Amazon’s marketplaces. These sellers have a total of 1,761,784 products available for sale in 2017. While the US is the major player in Amazon, China has a 25 percent share in the marketplace.
Amazon sells products directly and uses third-party sellers. Over 300,000 third-party sellers began working with Amazon in 2017 alone. Over one million items were handcrafted under Amazon Handmade in 2017. Over 140 million items came from third-party sellers in between Thanksgiving and Cyber Monday 2018 with over one billion being ordered during the entire holiday season that year.
Best Sellers on Amazon
Some items sell better for third-party sellers with Amazon. In 2018, the top sellers for the site found success with the following categories:
- 18% were Electronics
- 15% were Clothing, Shoes, and Jewelry
- 13% were Home and Kitchen
- 11% were Health and Household
Feedback is essential for sellers, and buyers review the information to make informed purchasing decisions. In 2019, feedback statistics showed the following:
- 113,098,076 reviews were left up to May
- Only 4 percent of feedback was negative
- An average of 9,644,400 reviews for sellers are left monthly 14
- Sellers are divided into two categories with Amazon.
- Professional sellers – $39.99 per month with 10-15 percent of transactions
- Individual sellers – $0.99 per sale
Professional sellers are designated as those who sell more than 40 items per month. Amazon offers convenience to sellers as well as buyers with the Multi-Channel Fulfillment centers, which can store products, pack and ship them for third-party sellers.
Selling on Amazon
Sellers find Amazon.com an appealing platform for sales for several reasons. The company offers exceptional support for both individual and professional sellers. For instance, both categories of sellers can add new products and can have Amazon handle the customer service aspect of selling along with shipping and fulfillment of orders.
In addition, professional sellers can sell products in Canada and Mexico as well as the US, all from a single account. They can use the Amazon Marketplace Web Service for bulk listing and reporting. Professional sellers can customize shipping rates and offer special promotions and receive top placement on product detail pages.
All sellers can add items to 20 product categories with professional sellers having at least another 10 to choose from. Once you register an account, you can start selling. You can either sell items already listed on Amazon or add products that are brand-new. You receive payment minus any fees once a buyer makes a purchase. Amazon takes care of shipping and notifies the seller unless you choose to do the shipping on your own.
Online sellers have found Amazon to be the best place to earn money. According to statistics from 2016, Amazon is the only site to have sellers earning between $10 and 100 million. In the $1 – $10 million category, 14.6% of sellers hit this mark for Amazon while only 3.9% made it with eBay and 4.5% achieved it through other sites.
Amazon also had the top percentage of sellers in the $100,000 to $1 million categories with NewEgg coming in second and eBay at third. You can see the breakdown in the following chart:
|Site||Under $10,000||$10,000=$100,000||$100,000-$1 Million|
What this chart indicates is that sellers who want to make more money will find Amazon the best avenue for success. Of those who sell products using an online marketplace, 63 percent say this is their only platform. 55% have a profit margin over 20 percent and 6 percent have impressive margins at more than 50 percent.
The majority of sellers carry between 100 and 1,000 products at 44.1 percent. Another 36.8 percent of sellers have at least 1,000 products but not more than 10,000. Only 5.9 percent carry more products and 13.2 percent carry less. What is interesting to note is that 100 to 1,000 products provide the majority of revenue regardless of how many products they carry. In fact, 87 percent of sellers make the most of their money on fewer than 1000 products.
Sales and Revenue
The bottom line is what determines the success of a company, and it must keep increasing each year to ensure long-term success. Amazon has done quite well in this area with sales and revenue going up annually.
- 2018 – $232.9 billion
- 2017 – $177.9 billion
- 2016 – $136 billion
- 2015 – $107.01
- 2014 – $88.99
- 2013 – $74.45
- 2012 – $61.09
- 2011 – $48.08
- 2010 – $34.2
- 2009 – $24.51
- 2008 – $19.17
- 2007 – $14.84
- 2006 – $10.71
- 2005 – $8.49
- 2004 – $6.92
- 2018 – $10.1 billion
- 2017 – $3 billion
- 2016 – $2.4 billion
Sales for the first quarter of 2019 continue the positive trend the company has been seeing for the past several years. Revenue for the first quarter was at $59.7 billion, which was up 17 percent from the same period a year ago.
Amazon made several important decisions during this first quarter that not only contributed to the numbers, but they enhance expectations for future growth. The workforce increased by 12 percent from the year before.
- Prime Now delivery for Whole Foods Market expanded into nine new markets in the US.
- Amazon Day was launched to allow members to select a day of the week for delivery
- First accepted EBT cards from New York as part of a pilot program that is in conjunction with the US Department of Agriculture
Here are some interesting facts about revenue for the first quarter of 2019 for Amazon:
- Revenue from subscriptions, of which Prime is included, was increased by 40%
- Net income increased by 118.6% from the same period in 2018
- International sales made up about 40% of total net sales
- Money spent on marketing was also up by 37.3%
- Money spent on technology and content went up by 17.3%
In 2017, with net sales at $177.9 billion, it made $60.5 billion in just the fourth quarter for holiday shopping. Each year sees major increases in sales with an impressive increase of $150 billion since 2008 when it was $19 billion.
Break down the annual sales and it’s even more impressive:
- Average daily sales in 2017 were $410 million
- The average hourly sale was $17 million
- Average sales by the minute were $283,000
- Average sales by the second were $4722
- The company experienced a loss of $4.8 million when the website was down for just 40 minutes
Another reason that Amazon is successful is that the company doesn’t focus on just one thing. You can look at the following statistics which show where the website makes its money and how it continues to grow in each of those areas.
- Retail products – 67% – up from $76.9 billion in 2015 to $91.4 billion in 2016
- Retail third-party sellers – 17% – up from $16.1 billion in 2015 to $23 billion in 2016
- Amazon web services – 9% – up from $7.9 billion in 2015 to $12.2 billion in 2016
- Amazon Prime and other subscriptions – 5% – up from $4.5 billion in 2015 to $6.4 billion in 2016
- Other – 2% – up from $1.7 billion in 2015 to $3 billion in 2016
The market share value was $669.8 billion for Amazon in 2017. Jeff Bezos, the CEO of Amazon, was the world’s wealthiest man in 2017 with a net worth of $115 billion. That’s not too bad for a company that got started in Bezo’s garage as a bookseller.
Amazon doesn’t take success for granted. In fact, the company spent $3.4 billion on advertising in 2017 alone. This is an increase of 28 percent from 2016. Marketing may include email marketing as well as traditional TV ads.
Amazon has claimed almost half the US e-commerce industry at 49 percent for 2018. That comes to a total of 5 percent of all retail, including offline purchases. This is more than the three top competitors:
- eBay – 6.6%
- Apple – 3.9%
- Wal-Mart – 3.7% 18
Amazon’s market value was at $427 billion in December of 2017, which is mind-blowing. But to understand the immensity of these numbers, you can compare it to the market values of other retailers at the same time:
- Wal-Mart – $221.1 billion
- Target – $29.4 billion
- Best Buy – $14.9 billion
- Macy’s – $8.9 billion
- Nordstrom – $7.4 billion
- Kohl’s – $6.8 billion
- JCPenney – $1.8 billion
- Sears – $1.2 billion
It is expected that Amazon will continue to dominate the e-commerce market with growth each year.
- 2016 – 34%
- 2017 – 37%
- 2018 – 41%
- 2019 – 45%
- 2020 – 47%
- 2021 – 50%
Trends Towards the Future
Amazon is constantly looking forward to seeing avenues for expansion and to remain relevant. Some of these areas include the following:
- Advertising – Amazon’s advertising has surpassed that of Snapchat and Twitter. It’s easy to see how this focus can benefit the company as it has a large database of users with a lot of details on behavior and other data.
- Prime Video – In 2017, Amazon had a goal to spend $4.5 billion to create original content for viewers. This amount is twice what HBO allots annually and it’s live in 200 different countries.
- International Expansion – More than half of US households have Amazon Prime, so it only makes sense for Amazon to expand its focus globally. In fact, India has reported that the Amazon marketplace is growing faster than any other.
- B2B – While Amazon has focused on the individual consumer in the past, the company can also provide goods and services for businesses and organizations.
- Fulfillment by Amazon – Amazon is already successful in shipping and logistics for small businesses, but it can expand upon this area and dominate the shipping industry.
One of the areas where you can expect to see Amazon’s growth is in purchasing other companies. Amazon purchased The Washington Post at $250 million and then went on to buy Whole Foods at $13 billion. As the company continues to increase profits, it must find a way to reinvest those as it reinvents itself.
Bezos hosted a conference where new technology was introduced and manufacturers and other parties demonstrated products and opportunities. Even businesses in the health industry attended, which provides a hint that Amazon’s interests may expand drastically in the future.
One of the big changes for the company is adding a second headquarters location. Amazon made the announcement in 2017 and invited cities to compete for the opportunity, which would ultimately include a location equal to Seattle and hiring numerous employees. As city mayors and managers thought about the economic boost this would provide to their regions, many cities got on board.
Amazon narrowed it down to 20 finalists before finally selecting Arlington, Virginia as its new base. The goal is to hire 25,000 employees once the site has been built. While there are some challenges that lie ahead as the company must work with city governments and opposition, most see the potential for success with all parties by being the site of a second headquarters for Amazon.
It is expected that Amazon will continue to expand in new directions and tackle new industries. The quickest way to die is to grow stagnant, and Bezos has no intention of doing that. To keep Amazon competitive, the company must look at innovation and how it can be marketed. Everything is filtered through what will appeal and benefit customers to ensure Amazon remains a customer-centric company.