How Amazon Makes Most Of Its Money

Alexa, cloud computing, delivery drones, and more: For all its headline-grabbing innovations, the business model for Amazon.com can seem dizzyingly complex. The reality is much different though. Amazon’s core business model is actually fairly simple. In this article, we’ll explore how Amazon produces its sales and profits, as well as a few more points about how investors should think about the world’s largest e-commerce operator. Amazon organizes its reporting structure around two main lines of business: its online retail operations and its Amazon Web Services (AWS) cloud computing platform — Amazon further divides retail into North America and International sub-segments. A clear split shines through between Amazon’s main sources of sales and operating profits. Its e-commerce platform clearly drives the top line. But AWS produces the bulk of its actual earnings, even as the company has repeatedly slashed prices for its cloud computing products in a bid to capture as much market share as possible. Read more at The Motley Fool.