Amazon is Huge. But Do You Know Just How Massive It Has Grown?

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Jul 13, 2018
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Amazon (NASDAQ:AMZN)was started in a garage by founder and CEO Jeff Bezos in the summer of 1995. Legend has it that Mr. Bezos read in a newspaper, circa 1993 that e-commerce would grow at an astounding rate of 2300% per year. He shortlisted five products he believed would be good candidates for an online store: computer hardware, computer software, books, CDs, and videotapes.

Amazon has come a long way in its 20+ year history

He settled on books and Amazon.com sold its first book in July 1995. By late 2001 when quarterly profits first struck $1 billion, the company made its first profits. Margins were very thin back then, only $5 million profit on $1 billion revenue.

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Fast forward to the present and Amazon employs nearly 200,000 people just in the USA. But just how large is Amazon exactly?

Amazon is now predicted to take 50% of American e-commerce sales by the end of this year!

Survey firm eMarketer has been closely tracking sales trends for Amazon, all the way down to specific categories and has stated that Amazon is on pace to capture 50% of the U.S. e-commerce market by the end of 2018. Sales are expected to reach $258.2 billion for the year which is truly mind-blowing.

This makes Amazon the largest internet company in the world by revenue and the e-commerce landscape isn’t even close.

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If Amazon is basically at 50% then what is the #2 spot? Ebay (NASDAQ:EBAY) , with a whopping …. 6.6%. Next is Apple (NASDAQ:AAPL), of all companies with 3.9% followed by Walmart (NYSE:WMT) with 3.7% and the list quickly drops from there.

eMarketer did notice a trend in the overall mix of Amazon.com sales versus sales done on Amazon.com’s Marketplace. And the Marketplace is trending up versus legacy Amazon.com sales.

Items sold on the marketplace aren’t Amazon’s liabilities, the company has no legal ownership of the inventory prior to it getting sold with the customer and there are some big advantages to that the firm no doubt enjoys.

eMarketer also took a look at the overall sales mix of product categories sold on the site.

eMarketer also took a look at the overall sales mix of product categories sold on the site.

Computers and other electronics are the obvious leaders. They are generally high price ticket items that are obsoleted every year or so and thus volume and average selling price are both high.

Where Amazon is powering up is clothes and other worn accessories. The category has shown three straight years of growth and is showing no signs of slowing down.

Total sales picture

It probably won’t be too long before Amazon reaches over $300 billion in sales.. 2016 was $150 billion in total sales, 2017 saw the figure crest above $200 billion and now 2018 will hit near $260 billion.

Now keep in mind how much room for growth there is. In 2017 total retail sales in the U.S. hit $5.07 trillion, and in that same year consumers spent $453 billion on the web for retail purchases. With e-commerce at just under 10% yet growing wildly, there doesn’t seem to be an end in sight for Amazon’s breakneck growth its been enjoying. One day deliveries are becoming more and more available to more consumers and we haven’t even seen the mass roll out of drone deliveries….. yet.

For all of you loyal Amazon.com shoppers be prepared for Amazon Prime Day that kicks off this Monday July 16th at 3pm ET.

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