This episode breaks down Amazon's 2018 shareholder letter and Q1 2019 results, offering a rare look into its 1P and 3P revenue split and overall GMV. It's a must-listen for ecommerce operators to understand Amazon's sheer scale, its impact on the retail landscape, and Jeff Bezos's philosophy on experimentation and failure. The insights provide a strategic lens on how Amazon thinks about growth and marketplace dynamics.
EP172 - Amazon Shareholder Letter and Q1 Results Amazon Annual Shareholder Letter Jeff Bezos released the Amazon 2018 Annual Shareholder Letter, which this year was focused the the phenomenal success and growth of the Amazon Marketplace. In the process, Amazon disclosed the breakdown of it's 1P and 3P revenue from 1999 - 2018, as well as giving us the "physical gross merchandise volume (physical GMV)" for the first time. In 2018 1p = $117B, and 3P = $160B. For a total GMV of $277B (which means US GMV is approx $161B). Prior to this disclosure we've all had to guess as the the actual size of Amazon's retail business. This makes Amazon the second largest retailer in the US, behind Walmarts $318B (excluding Sam's Club), and ahead of Krogers $116B. The letter also talks about the importance of companies being allowed to experiment (wondering as Jeff calls it), even if many of those experiments ultimately fail. No customer ever asked for AWS, but a few success like AWS can fun many failures. Even failures can be valuable, such as the Fire phone, which ultimately led to the Amazon Alexa. Jeff argues, that as the scale of a company grows, so much the scope of these failures. The letter takes a victory lap for some of the improvements in employee pay and benefits that Amazon has put in place and a challenge to other retailers. A challenge that other retailers like Walmart did not particular appreciate. As always, the letter closes with a reminder that the 1997 shareholder letter still accurately reflects the guiding principals of the company. It's very likely that this years letter, is in response to an increasing call from thought leaders and politicians to regulate and even break up large tech companies like Amazon. Q1 Results Revenue came in at $59.