Inc. (AMZN), the world’s largest online retailer, is growing rapidly in a broad range of businesses under founder and CEO Jeff Bezos, including its core e-commerce operations, cloud services, digital advertising, groceries, and prescription drugs. It also sells products such as the Alexa personal assistant and ecosystem, and movies and television shows through its Amazon Prime Video platform. Amazon's rivals include Walmart Inc. (WMT) and Alibaba Group Holding Ltd. (BABA).

Key Takeaways

  • Amazon makes money through its retail, subscriptions, and web services, among other channels.
  • Retail remains Amazon's primary source of revenue, with online and physical stores accounting for the biggest share.
  • Amazon's North America segment was the fastest growing out of all its segments for Q3 2020.
  • The company is facing an antitrust investigation concerning its use of data to launch products that directly compete with third-party sellers.

Amazon's Financials

Amazon ranks as one of the world's top companies by market value. As of November 6, 2020, Amazon had a market cap of $1.6 trillion.

The company's net income nearly tripled year-over-year (YOY) in Q3 2020, which ended September 30, 2020. Net income rose 196.7% to $6.3 billion for the third quarter compared to the same three-month period a year ago. Revenue, which Amazon calls total net sales, rose 37.4% to $96.1 billion. Profits were fueled by robust revenue growth, but received an additional boost from lower operating expenses as a percentage of total sales and a shift from logging non-operating expenses in the prior-year quarter to posting non-operating income in Q3 2020. Operating income grew 96.2% to $6.2 billion.

Amazon's Business Segments

Amazon divides its business into three segments: North America, International, and AWS. The first two of these segments, North America and International, refer to geographical breakdowns of Amazon's retail business. They generate revenue from retail sales in North America and the rest of the world, as well as from subscriptions and export sales for those areas. Retail can further be broken down into online stores, comprising the bulk of sales, and physical stores. Company-wide, online stores accounted for $48.4 billion in sales in Q3 2020, or about 50% of net sales, while physical stores generated $3.8 billion in sales, or about 4% of net sales.

North America

Amazon's North America segment dominates its net sales, accounting for $59.4 billion in Q3 2020. This is about 62% of the company's net sales for the quarter. Operating income for the North America segment in the third quarter was $2.3 billion, comprising about 36% of the total operating income for all segments. North America was Amazon's fastest growing sector for the quarter.

Aside from retail, the other primary source of revenue for North America is subscriptions, including Amazon Prime, which offers unlimited free shipping, and unlimited streaming of movies, TV shows, and more.


There is one Amazon segment that has not thrived in recent years: the International business. This segment consists of Amazon's retail business for consumer products and subscriptions for internationally-focused online stores. It also includes export sales from those stores, but not those from North America-focused online stores. Amazon has lost money in each of the last 3 years in its International segment. However, in Q3 2020, the segment posted an operating profit of $407 million compared to an operating loss of $386 million for the year-ago quarter. Net sales for the International segment grew 37.2% to $25.2 billion, comprising about 26% of the company's total net sales.

Amazon Web Services (AWS)

Amazon Web Services (AWS), launched in 2006, provides services to businesses, government agencies and academic institutions to store information and deliver content. Amazon says AWS provides an "infrastructure platform in the cloud," for a variety of "solutions" such as hosting applications and websites, providing enterprise IT, and content delivery. Amazon's AWS segment generated net sales of $11.6 billion and operating income of $3.5 billion in Q3 2020, up from net sales of $9.0 billion and operating income of $2.3 billion in Q3 2019. AWS sales and profit have consistently grown in the past three years. Although net sales from AWS are far below net sales for the North America segment, AWS's operating income is substantially higher. Net sales for the segment comprise about 12% of total net sales and operating income comprises about 57% of Amazon's total operating income.

Amazon controls about a third of the global cloud market, nearly twice as much as its next closest competitor. AWS's biggest rivals are Microsoft Corp.’s (MSFT) Azure and Alphabet Inc.’s (GOOGL) Google Cloud.

Amazon's Recent Developments

Amazon is facing a new antitrust investigation into its online marketplace. The investigation is being led by the U.S. Federal Trade Commission and attorneys general from New York and California. The company is facing increased scrutiny over its use of data collected from third-party sellers on its platforms. Both competitors and regulators claim that Amazon is using the information to launch competing products, which violates its own stated policies.


On October 6, 2020, after a 16-month investigation into the business practices of tech behemoths Apple, Amazon, Facebook and Alphabet, the House Judiciary subcommittee on antitrust released its recommendations on how to reform laws to avoid the continued emergence of digital monopolies. The Democratic-majority staff presented a nearly 450-page report concluding that the four Big Tech companies dominate the industry in ways that affect the U.S. economy and democracy, suggesting Congress implement changes to antitrust laws that could result in parts of the businesses being separated.

How Amazon Reports Diversity & Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Amazon and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Amazon releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Amazon discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Amazon breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and and LGBTQ+ identity.

Amazon Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors          
General Management ✔ (U.S. Only)      
Employees ✔(U.S. Only)