Amazon -- How the Business Works
International Stores: $162B rev (22.6%)
3P Seller Mix: 62% of units (highest ever)
Logistics: 1M+ robots, same/next-day 9B+ units
Grocery: $150B+ gross sales, top-3 US grocer
Market Share: ~31% (#1 cloud provider)
Op Margin: ~35% (highest segment)
Backlog: $244B (+40% YoY)
Custom Silicon: Trainium + Graviton >$10B run rate
US Share: ~15% (#3 digital ads)
Prime Video Ads: 315M+ global viewers
CTV: Amazon DSP + Roku (largest US footprint)
Moat: 1P purchase data, closed-loop attribution
| Revenue Stream | FY2023 | FY2025 | 2-Yr CAGR | Description |
|---|---|---|---|---|
| Online Stores | $231.9B | $269.3B | 7.8% | Direct retail sales (1P) across all categories |
| 3P Seller Services | $140.1B | $172.2B | 10.9% | Commissions, FBA fees, shipping services for 3P sellers |
| AWS | $90.8B | $128.7B | 19.1% | Compute, storage, database, AI/ML, networking services |
| Advertising | $46.9B | $68.6B | 20.9% | Sponsored products, Prime Video ads, DSP, CTV |
| Subscriptions | $40.2B | $49.6B | 11.1% | Prime membership, Audible, Kindle Unlimited, Music |
Members
Purchases
Sellers
Selection
Data ($69B)
Revenue
Members
E-Commerce (82% of revenue). Amazon operates the world's largest online marketplace across North America ($426B) and International ($162B) segments. Revenue comes from two models: first-party retail (Amazon buys and resells inventory, $269B) and third-party marketplace (sellers list products and Amazon collects commissions, fulfillment fees, and shipping revenue, $172B). The 3P mix has reached 62% of units -- the highest ever -- making the business increasingly capital-light. Amazon has built an unmatched logistics network with 1M+ robots, delivering 9B+ units same/next-day globally. Grocery ($150B+ gross sales) and quick commerce (30-minute delivery) are extending the total addressable market. Prime membership ($49.6B subscription revenue) locks in repeat purchases and provides predictable recurring revenue.
AWS Cloud (18% of revenue, ~57% of operating income). Amazon Web Services is the world's largest cloud infrastructure provider with ~31% market share, ahead of Azure (~22%) and Google Cloud (~11%). AWS generated $129B in revenue growing 20% YoY, with $45.6B in operating income at ~35% margins. The business provides compute, storage, database, AI/ML, and networking services to millions of customers. AWS has been the Gartner cloud leader for 15 consecutive years. The $244B backlog (+40% YoY) provides exceptional revenue visibility. Custom silicon (Trainium AI chips and Graviton CPUs, >$10B run rate growing 100%+) provides a structural cost advantage versus competitors reliant on third-party GPUs. Bedrock, the managed AI platform, is growing 60% quarter-over-quarter.
Advertising (10% of revenue, highest growth). Amazon's advertising business has grown from $31B (FY2021) to $69B (FY2025) -- 2.2x in four years. It is the third-largest digital advertising platform in the U.S. with ~15% share, behind only Google and Meta. The business benefits from a unique structural advantage: Amazon has first-party purchase data and closed-loop attribution that no competitor can replicate. When a shopper sees a sponsored product ad and buys it, Amazon can directly measure the return on ad spend. Prime Video ads reach 315M+ global viewers, and the Amazon DSP combined with a Roku partnership creates the largest connected TV advertising footprint in the U.S. Advertising is estimated to carry 50%+ operating margins, making it the highest-margin business within Amazon and a critical funding source for the company's massive infrastructure investments.