Amazon, a corporation known for its online retail store, was started by an internet merchant in 1994. Online commerce has become one of the pillars of the 21st century and Amazon is just one of the pioneers that have taken the concept to full scale. The company is also known for its huge success in terms of web sales and customer satisfaction. As per an estimate, Amazon has sold more than six hundred million items worldwide.
Amazon is led by Jeff Bezos, who has been known to inject new life into previously dormant businesses. In the case of Amazon, this can be referred to as “growing pains” and it took a few years for Amazon to finally realize its full potential. To date, Amazon is one of the largest companies in the world and it certainly leads the market in terms of customer satisfaction. It has a strong brand name and the ability to provide excellent customer service. At the same time, Amazon generates strong operating income despite its relatively small size. The key to Amazon’s success has been its ability to leverage its scale and its Net sales figures.
Let us now analyze the key metrics related to operating income and total net sales of Amazon. We will concentrate on gross profit margin (GFL), gross sales, and the gross margin. First of all we would like to know what kind of a gross profit margin does Amazon have. Net profits are reported according to each quarter and so far, we have not heard about a quarterly gross profit figure for Amazon. According to the latest information provided by Amazon, for the second quarter of this year, they are expecting a gross profit margin of fifty-six million. Amazon’s most recent quarter was quite profitable as they were able to increase their gross sales by eleven percent.
Another important question that is asked by most people when they talk about Amazon is about the profitability of Amazon online stores and whether or not Amazon can sustain its present level of operation. It should be mentioned that Amazon has over six thousand physical retail stores and more than four hundred of its digital online stores. The net sales of Amazon are much higher than its physical retail store operations. As of the end of fiscal year 2021, Amazon’s gross sales were close to two billion dollars and the gross profit margin was twenty-eight percent.
As far as the question of profitability is concerned, it is believed that Amazon still only have its best online store, Amazon dot com, as its only remaining brick and mortar store. There are reports that indicate that Amazon will be expanding its ecommerce operations in the near future. However, until the release of Amazon q3 2021 financial results, it is difficult to say what other locations could be included in its list. According to earlier reports, Amazon is considering North Carolina, Florida, New York City, Los Angeles, Chicago, Texas, Las Vegas and Washington D. C. as some of its possible future locations. Amazon has also recently trademarked its ecommerce venue in Singapore and this can be considered as another sign that it is serious about expanding its business. Further, Amazon has already acquired a number of web businesses in the form of properties for its cloud infrastructure.
Nowadays, there are many online stores that offer similar products and services at very low prices. Even though, there are many who believe that physical retail stores will continue to have a dominant share in the ecommerce industry, Amazon is making a move to overcome all such challenges by providing its customers with more options. This will help them make more profit out of their online purchase. In recent years, Amazon also acquired a majority stake in Yahoo web services and in the process it gained additional investment. All these developments have made Amazon a bona fide brand and it is in a position to experiment even more in the coming years.