- Insider Intelligence forecasts that Amazon’s retail ecommerce sales worldwide will reach $729.76 billion in 2022.
- Net sales increased 22% to $469.8 billion in 2021, up from $386.1 billion in 2020, according to Amazon’s quarterly earnings report.
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As an ecommerce behemoth, Amazon reigns bigger than the next 14 largest US retailers combined. And while it’s online stores remain the biggest revenue stream, there are many other business segments working in tandem to fuel Amazon’s flywheel: defined as “a series of interconnected elements that are internally reinforcing and competitively exclusionary,” according to Matthew Ball, managing partner of Epyllion and former global head of strategy at Amazon Studios. “Improvements in selection drives better customer experiences, which then attract more sellers, which improves selection.”
This diversification of Amazon’s revenue streams has been key to its virtuous cycle, particularly as the company uses its various business divisions to support and drive growth for other divisions. The corporate powerhouse spans multiple industries, moving well beyond retail ecommerce and firmly into spaces such as cloud computing, online advertising, and digital payments.
We assessed Amazon’s Q4 2021 revenue by segment to see how each division drives the business—both individually and collectively within the ecosystem—and share insight on how those earnings might grow.
Amazon revenue by segment
As the largest online retailer in the world, Amazon has steadily added segments and business lines to create a powerhouse that spans multiple industries. We break down Amazon’s Q4 2021 revenue by segment, with key trends to expect from each:
Online stores – $66.08 billion
Online store sales, as the dominant revenue stream, saw $66.08 billion in net sales—consistent with results compared to Q4 in 2020. These sales include transactions on products in both a physical and digital format (including e-books, videos, games, music, and software), contributing to Amazon’s biggest-ever Black Friday and Cyber Monday driving growth for Q4.
Its stronghold on customers who want convenience and speed from everyday purchases will sustain this upward trajectory into 2022, especially as the company invests in alternative conversion tactics such as the Alexa voice assistant and Amazon Live streaming platform. The biggest areas of potential lie in the use of Amazon for discovery, inspiration, and impulse purchases, where Shopify and Instagram Shopping excel with more social experiences.
By our estimates, Amazon’s global retail ecommerce sales will reach $729.76 billion in 2022, an 18.8% increase year-over-year (YoY). The US alone will make up $445.31 billion of that share, accounting for 41.8% of the country’s total retail ecommerce sales.
Third-party seller services – $30.32 billion
With 11% YoY growth from Q3 2020, third-party seller services brought in $30.32 billion in net sales. This includes commissions and any related fulfillment and shipping fees, and other third-party seller services.
According to the Q4 2021 earnings report, more than 130,000 third-party sellers worldwide surpassed $100,000 in sales on Amazon, and between Black Friday and Christmas Day. US-based third-party sellers also smashed records, selling an average of 11,500 products per minute.
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Amazon Web Services – $17.78 billion
Amazon Web Services (AWS), its public cloud infrastructure and computing service, generated $17.78 billion, a 40% growth YoY. Offered in 26 regions globally, AWS’s more than 200 services range from core computing and storage to AI tools and low-code or no-code solutions for product and app developers.
The cloud platform announced significant customer momentum over the last few months, onboarding major companies across a range of industries, including Nasdaq, Meta, Goldman Sachs, and Pfizer. Plus, not only has AWS expanded its global footprint with new regions in Asia Pacific and Western Canada, it’s announced the launch of 115 new services and features in machine learning, 5G, data visualization, and more.
Advertising Services – $9.72 billion
Amazon is well positioned to continue lessening the gap with Google and Facebook, the two leaders in the digital ad space. In Q4 2021, Amazon advertising services brought in $9.72 billion, a 32% increase YoY.
We estimate that Amazon’s net US ad revenues will more than double between 2020 and the end of our forecast period in 2023, when they will reach $31.97 billion. This growth is bolstered by Amazon’s wealth of user data, which will be invaluable as regulation limits advertiser access to customer information.
Amazon’s investments in entertainment properties and content suggest a lot of long-term potential for highly targeted and integrated ad and content experiences, where advertisers can combine contextual relevance, audience targeting, and the ability for shoppers to make purchases quickly and easily.
Subscription services – $8.12 billion
In this most recent quarter, the division reported nearly $8.12 billion in sales, a 15% increase YoY. These include earnings from annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-AWS subscription services.
For the first time since 2018, Amazon will be increasing the monthly cost of its Prime in the US from $12.99 to $14.99, said to help cover increased member benefits and a rise in wage and transportation costs. This comes as part of Amazon’s heavy investment in Prime, with increased product selection, discounts, and exclusive entertainment—reasons why we expect the majority of US consumers to tolerate a price hike. This year, we estimate the number of US Amazon Prime users to reach 157.4 million, a 3.7% increase YoY.
Physical stores – $4.69 billion
Amazon’s physical stores saw a 17% increase compared to a year prior, reaching nearly $4.69 billion in net sales. Amazon operates close to 600 physical stores in the US, the majority of which include Whole Foods Market, which Amazon acquired in 2017. The rest are Amazon-branded stores, including Amazon Fresh (grocery), Amazon Go (cashierless convenience stores), Amazon 4-star (featuring products with a four-star rating or higher on Amazon.com), Amazon Books (carrying books and electronics), and Amazon Pop Up (shopping center locations that highlight various brands and trends).
This year, Amazon will continue positioning itself as a leader in retail tech, experimenting with new non-ecommerce concepts that incorporate augmented reality and machine learning. Amazon Style, its first-ever physical store for apparel, is set to open in L.A., where algorithms will suggest new looks; while the Starbucks and Amazon Go cafes will see two new locations in New York.
While these concepts may never generate the level of revenues brought in by Amazon’s ecommerce business, they will continue to serve as discovery platforms for the products and services available through Amazon, whether in-store, online, or somewhere in between.
Other – $710 million
Amazon’s “other” segment saw an 18% growth YoY, with more than $710 million in sales. This revenue source primarily includes sales related to “other” service offerings.
Amazon revenue growth and forecasts
Since joining the “$1 trillion market cap club” in early 2020, Amazon has seen steady revenue growth, reporting more than $100 billion in net sales each quarter for 2021. Amazon is predicting a strong start to 2022, with Q1 sales expected to be between $112.0 billion and $117.0 billion, or to grow between 3% and 8% compared with first quarter 2021.
To stay up to date on Amazon revenue growth with forecasts, briefings, charts, and research reports from Insider Intelligence, be sure to read our The Power of Amazon report, which evaluates which of Amazon’s business divisions are truly forces to be reckoned with; which of those divisions leverage Amazon’s market dominance to establish themselves in new industries; and which are experiments that help Amazon test, learn, and iterate to improve other parts of the flywheel.