Amazon's Q1 2018 earnings reveal a powerhouse accelerating across all segments, from a significant revenue surge driven by strong North American growth and the impact of Whole Foods, to the explosive expansion of AWS and a rapidly maturing advertising business. Ecommerce operators should take note of the continued dominance of third-party sellers on the marketplace and the strategic importance of Amazon Prime, which saw a price increase and boasted 100 million members. This episode highlights Amazon's aggressive growth trajectory and its deep entrenchment in multiple facets of the digital economy.
Key takeaways
Amazon's third-party marketplace generated an estimated $66-69 billion GMV, significantly outpacing their first-party sales and reaffirming the importance of marketplace strategies for sellers.
Amazon Ad revenue reached $2 billion in Q1 2018 with 132% year-over-year growth, indicating a burgeoning and high-performing advertising channel that merchants should integrate into their marketing spend.
The 20% increase in Amazon Prime fees to $119, coupled with 100M paid members, reinforces the value proposition of subscription models and customer loyalty programs for recurring revenue.
AWS revenue grew 48% year-over-year with $1.4 billion in profits, demonstrating the financial power of cloud services and the potential for diversified revenue streams beyond core retail.
North American sales drove $1.1 billion in profit, while international operations lost $622 million, highlighting the geographical nuances of Amazon's profitability and expansion strategies.
EP129 - Amazon Q1 Earnings Hot Take This episode is a hot take of the Amazon Q1 2018 earnings Amazon Q1 Earnings Highlights $51b, which is a 43% y/y increase - 39% constant currency, 27% ex- Whole Foods NA was up 46% y/y which drove $1.1b in profits (26% ex WFM) Intl was up 21% constant currency and lost $622m AWS had a material acceleration up 48% y/y constant currency and profits were $1.4b Amazon Prime fee increasing to $119 (20% increase) Marketplace 52% 3P by Unit sales 3P Growing at 60% (constant currency) JMP GMV analysis-> 1P - $31b / 3P - $69b = $101B GMV Wingo GMV estimate -> 1p - $37b/ 3p - $66b = $103b GMV Amazon Ads - $2B quarter 132% y/y growth (72% y/y growth before accounting change vs. 60% last quarter) Increasing possible Amazon becomes first $1 trillion dollar company Bezos Annual Letter 100M Paid Prime Members (likely 60M in N.A vs. 124M Households) Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 129 of the Jason & Scot show was recorded on Monday, April 30th 2018. Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. http://jasonandscot.com
What does this episode say about amazon & marketplaces?
Amazon's third-party marketplace generated an estimated $66-69 billion GMV, significantly outpacing their first-party sales and reaffirming the importance of marketplace strategies for sellers.
What does this episode say about paid acquisition?
Amazon Ad revenue reached $2 billion in Q1 2018 with 132% year-over-year growth, indicating a burgeoning and high-performing advertising channel that merchants should integrate into their marketing spend.
What does this episode say about finance & fundraising?
The 20% increase in Amazon Prime fees to $119, coupled with 100M paid members, reinforces the value proposition of subscription models and customer loyalty programs for recurring revenue.
What does this episode say about founder & leadership?
AWS revenue grew 48% year-over-year with $1.4 billion in profits, demonstrating the financial power of cloud services and the potential for diversified revenue streams beyond core retail.
What does this episode say about amazon & marketplaces?
North American sales drove $1.1 billion in profit, while international operations lost $622 million, highlighting the geographical nuances of Amazon's profitability and expansion strategies.
