5 Things You Probably Didn't Know About Amazon
Since Jeff Bezos founded Amazon.com in 1994, the company has been a trailblazer in the online-retail industry. Amazon has transformed the way the world shops, touching millions of lives in the process. Yet even though you have probably been a customer of Amazon, these five things about the company may take you by surprise.
1. Amazon wants to ship you orders via unmanned flying drones
On Dec. 1, Bezos made an appearance on 60 Minutes to describe the delivery method of the future for Amazon customers, Prime Air. Through the use of small unmanned aircraft, known as octocopters, small yellow bins would be picked up at Amazon fulfillment centers and then flown through the air, arriving at customer locations in 30 minutes or less.
This service, Bezos said, could be in operation in as little as four years, and one day "Prime Air vehicles will be as normal as seeing mail trucks on the road today," Bezos said, though he did, however, note that he is an optimist when it comes to things like this, and that further development and time for the Federal Aviation Administration to come up with rules and regulations are required before octocopters can take to the skies.
2. Amazon is a growing force in the cloud-computing industry
Amazon does many things, to say the least--it is the largest online retailer in the world, a major player in the tablet and e-reader markets, the operator of one of the largest apps stores in the world, and progressively more and more each day a cloud computing titan.
Cloud computing is a relatively unknown segment--its official name is Amazon web services, and in 2012 the segment generated $2.5 billion in revenue. Right on Amazon.com's homepage, the third item down is titled Amazon Cloud Drive, which is a free service that gives anyone 5 GB of storage in the cloud. This is just one of the services Amazon advertises as "flexible and low cost IT resources."
You may be saying, wait, I've heard about something like that. What you are probably thinking of is Google's Google Drive, which offers 15 GB of free storage in the cloud. This service is in essence identical to Amazon's Cloud Drive.
What is the real shocker is that AWS is expected to generate $20.5 billion in revenue by 2020, which by far makes it the fastest-growing segment at the company.
3. In 2012 Amazon lost money
In 2012, Amazon raked in approximately $61.1 billion in revenue. Since Amazon is notorious for its razor-thin margins, let's just assume that the company was only able to take home $0.025 out of every dollar, translating to a thin 2.5% profit margin. That would put Amazon's 2012 profit at about $1.5 billion. But what would you say if I told you that Amazon's profit margin was lower than that. In fact, in 2012 the company's profit margin was on the wrong side of 0.
In 2012, Amazon lost $39 million dollars, which, while not a big number, is still a loss. At the end of the day, Amazon produced $61 billion in sales for nothing. For 2013, $345 million is expected in profit.
4. An Amazon employee generates three times more than a Wal-Mart employee
Amazon employed 88,400 individuals in 2012, and with more than $61 billion in annual sales, that puts each Amazon employee as accounting for $691,097 of revenue. Using the same calculations for Wal-Mart , each one of its 2.2 million employees were responsible for $213,255 of revenue in 2012.
Therefore, an Amazon employee generates 3.2 times more than a Wal-Mart employee. This speaks to how big of an advantage Amazon has versus traditional retailers such as Wal-Mart by operating exclusively online.
5. On Cyber Monday, Amazon sold 426 items per second
On Cyber Monday, Amazon sold almost 37 million items. That works out to 427 items per second, shattering the previous record, which was set on Cyber Monday last year (306 items per second).
In the press release announcing the feat, Amazon put the sales into perspective by noting:
- Enough Crayola Marker Makers were sold to draw a line around the world four times
- Enough Himalyan Crystal Lamps were purchased that if they were each stacked on one another their collective height would equal Mount Everest's
- If Amazon had a single M&M for every Eminem album purchased during the holidays, the retailer would have almost 100 pounds of chocolate
Amazon is one of those "once-in-a-lifetime" companies that come along and change an industry forever. Sure the company lost money in 2012 and is only expected to make $345 million in 2013, but in the long run Amazon is only taking its first steps. By 2020, $226 billion is expected to be produced by the company in revenue, and the next big thing is always just around the corner with Jeff Bezos at the helm. That is why long-term investors must look past the ugly P/E ratio, which is currently sitting at more than 1,000, and look to the future.
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The article 5 Things You Probably Didn't Know About Amazon originally appeared on Fool.com.Ryan Guenette has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Google. The Motley Fool owns shares of Amazon.com and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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