Per CNBC in October, AWS was 16% of Amazon’s revenue. That’s definitely a pretty big chunk of it, for sure.
For a while, perhaps even now, it was the most profitable part of Amazon. The retail side has always been big on revenue, but the profit margin was either negative or less profitable than AWS. So it’s 16% of revenue, but probably a lot more than 16% of the profit comes out of AWS.
Their retail side is complete shit - an unusable front end that gives you a full page of paid results before showing what you typed in. Even then its often a knock off instead of what you’re asking for. Used goods sent out as new, incorrect goods sent out, counterfeits mixed with real goods, and haphazard shipping (is it tomorrow, next day, or next week with Prime? Who can tell anymore!).
It is ripe for a competitor with a better UX to steal their retail business.
I’ve seen multiple people say this, but it’s weird, because that’s not what I get when I search on Amazon.
Are folks exaggerating, or is there some kind of variation in the number of sponsored results being shown to different folks?
A lot of it is going to depend on the sort of thing you’re searching for. If it’s something generic with a bunch of Chinese no-brands making them, then you’ll see more ads. If you search for, I don’t know, a PS5, you’l see less.
I think on average I see about 2 out of every 5 or 6 results as sponsored, often then repeated later on down the page as an actual result, with weird little video ads and annoying “this isn’t what you searched for but buy it anyway” boxes every 6-8 results.
I actually wish other online storefronts were as easy to use as Amazon’s is. Try using Home Depot or Lowe’s, for example.
I think the amazon retail problem is that it’s full of junk products and outright scams. It you buy from brands you trust you’re good. I looked up a Go Pro just now and Amazon recommended me something called an Akaso as the top result. Wtf is that? Some Chinese knockoff? Is it reliable? Are the reviews real or part of the scam?
These are the first two pages I get when I search for a GoPro camera:
Yeah, there are a couple competitor products in the mix, but the rest are all GoPros. I wonder what determines the difference in ordering?
The only thing that makes it worthwhile at all is being here in Phoenix it is pretty much always same day delivery, and returns are possibly less painful than even returning something to a local store when there is a screw up, which does happen, but infrequent enough that we haven’t stopped using it. I can just walk in, and right back out at the Whole Foods about a mile away in a couple minutes and it is done.
re: basically rolling-a-d6 to actually get you want ordering from Amazon
day 1 - “Wow, I can order anything I want from Amazon! Free shipping! So cheap! I never have to leave the house!”
day 2 - “Shit, all my search results turn up crap that was paid to show up on my search list!”
day 3 - “Goddam it, my widget is just some piece of crap from China made out of carcinogenic plastic! Fuck this, I’m gonna run down to store X to pick this up. I mean, it should only take like a half-hour to drive there and get it, right?”
/spends day driving around looking for stores that once carried widget, but are now long gone because Amazon and Walmart undersold them by selling you cheap carcinogenic plastic
Back in my Navy days we had a saying for this: “HAHA you fucked yourself”
They’re not perfect, but that is nowhere near my experience with Amazon and I buy almost everything from them.
Go to Best Buy and they’ll match Amazon’s price. I do that all the time, especially with Blurays. I got my Beats for 50% off because Amazon was running a sale on the red ones!
They’re not perfect, but that is nowhere near my experience with Amazon and I buy almost everything from them.
“Asbestos hasn’t given ME cancer”
Note: I’ve had pretty much zero problems with Amazon, too, I just don’t like enormous huge monopolies that not only sell me stuff, but sell me, too
Don’t sweat it. Last time I tried to buy a scharmers on Amazon I got a cheap chinese knockoff.
Thanks, both of you, for the info.
Those are one-for-one the search results I get as well.
Maybe this is a level too meta, but my bigger problem with Amazon is that because of everything that’s happened with the review system over the last several years, it’s difficult to distinguish the good cheap Chinese knockoffs from the bad cheap Chinese knockoffs… and then because of that, there is no incentive for there to even be a good cheap knockoff any more, and you’re just getting the crappy stuff unless you take the effort to dig for the real brand. I’ve been doing a lot more Target/Best Buy/Staples house brand stuff the last year or two for things that I would have just grabbed the highest reviewed result at Amazon for 5 years ago, because I got tired of 4.whatever star things breaking inside of three months.
More on topic, to add to the AWS info, in fiscal 2021 AWS was 13.2% of net sales and 74.5% of operating income. (North America, which is what they call the segment that includes all of the traditional retail stuff, was 29.2% of operating income, and those add up to more than 100% because they lost the rest on international retail.) They also had non-operating income equal to roughly half of their operating income - don’t have the time to dig into that now but it could be a few things, related to either segment or other random things they do - but AWS operating income was still just under 56% of net income. That is where most of their profits are made.
Things may have improved some over the past few months - but for one case that drove me nuts it could be because the vendor gave Amazon $$$. When I went to look for the “Epicka Universal Travel Adapter” last summer, with quotes, it didn’t show up at all on the first page - nothing but knockoffs. Looks like they gave Amazon some money to show up on their listings since then.
Meanwhile over on Google, the second link in the search results is to the amazon page for the adapter. At least since the Pandemic, Google has been a better frontend for Amazon when searching, than Amazon has.