How Amazon Earns Profit? - Mission Education

Amazon Operating Profit

The majority portion of the Amazon’s operating profit come from its online retailer’s cloud division, amazon web services ( AWS ).
The AWS provides online services and tools which provide to software developer for running websites and applications.
The operating income of AWS at the ended 2020, was $13 billion ( 1300 crore dollar Indian rupees ).
The amazon reported net income of $21 billion for the year of 2021.
The Alibaba, Google, IBM, Microsoft and Oracle are also challenging the business of AWS.
The AWS is serving developers and end users with thousands of services. There are lots of new services comes from AWS.
The AWS revenue comes form the EC2 computing service.

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The EC2 is an oldest service of AWS and it generates majority of gross profit and operating profit.
The customers can lower their bills by reserving EC2 instances for future use.
The reserved instance can be as much as 75% cheaper than the on-demand instances.

The lambda service creates thumbnail when person upload a new image or photo in social media network.

Customers use S3 to store image, photos, videos and other types of files. The S3 has stored more than 100 trillion objects.
The gross margin of the S3 is in the range of 50 to 70%.
Moving of data into Amazon S3 is free but transferring a terabyte of data out of S3 can cost three times more than the monthly cost of storing terabyte in S3.

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The EBS can be attached to EC2 and hold data for them.
It provides storages volume for customers after delete data from EC2 services.
The gross margin of EBS stands between 60% to 70% said by Bhavan Suri, Co – head of technology equity research at William Blair.

The companies are buying software from other companies through AWS’ Market place.
The average listing fee by Amazon is 5% whereas Microsoft lowered its market place fee from 20% to 3% in the July 2020.

**CNBC market news