Amazon's bookstores are generating almost no revenue — and there's an obvious reason why

  • Amazon broke out "physical stores" in its earnings report for the first time.
  • Most of that revenue came from Whole Foods stores, but Amazon also operates about a dozen Amazon Books stores.
  • The numbers show that Amazon Books stores aren't really about generating a massive amount of money — they're likely more intended to be an added benefit for Prime members.

Amazon is officially a physical retailer.

The e-commerce giant broke out a "physical stores" category in its earnings report for the first time. This was the first earnings report since closing the purchase of Whole Foods closed, and the company says the lion's share of the revenue in that category — about $1.3 billion — is from Whole Foods.

That means that Amazon Books stores, which are also included in that category as Amazon defines it as places where "customers physically select items in a store."  There are about 12 Amazon Books stores, with three more on the way.

The numbers breakdown means that there's not a whole lot of revenue being generated from the chain's bookstores.

The first and most obvious reason why is that there isn't a whole lot of them yet. Twelve is a small number any way you slice it, and book sales aren't huge revenue drivers for any retailer. There are more than 460 Whole Foods in the world, in comparison.

More likely the real reason is that the bookstores aren't really a place for browsing and discovering books like a local independent bookstore — they're actually just a place for Prime members. There's no compelling reason for a non-Prime member to visit an Amazon Books store, except maybe to check out devices like the Amazon Echo or Kindle. 

The books prices for non-Prime members at list price — the same as what you'd pay at Barnes & Noble. Prime members, however, get the books at the price on, which is almost always significantly cheaper.

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7 shock-worthy facts about Amazon
7.5 percent of Seattle's working-age population are Amazon employees

Amazon has more than 300,000 employees worldwide, and 40,000 in Seattle alone.

As a portion of the city's working-age population — roughly 528,000 — that comes out to 7.5% of the city working at Amazon.

For perspective, if the same portion of New York City's adults worked for one company, that company would have about 488,000 locals on staff.

Amazon accounts for 43% of all online sales

Amazon used to be a way to buy books online; today, it's the default buying site for just about everything, especially for people who have Amazon Prime.

An analysis by Slice Intelligence released in February found that 43% of all US online retail sales were done through Amazon in 2016.

That's up from 33% in 2015 and 25% in 2012.

1 out of every 4 US adults has Amazon Prime.

Speaking of Amazon Prime, the company now counts approximately 63 million people among its subscriber base, or about 25% of the total US adult population.

That number may underestimate the true coverage, however, since it doesn't account for multiple adults in one household all sharing the same Prime account.

Amazon ships 1.6 million packages a day

Amazon fulfillment is a beast of its own.

A report from 2013 (the latest year for which data are available) found Amazon shipped 608 million packages that year, or 1.6 million packages a day.

As of 2015, Amazon estimated its fulfillment centers were within 20 miles of 31% of the US population, and within 20 miles of 50-65% of its core, same-day-accessible market.

That's enough cardboard to span all of West Virginia

A back-of-the-envelope calculation reveals all those packages (not including padded envelopes) yield roughly 26,400 square miles of cardboard.

The total land area of West Virginia, meanwhile, is just north of 24,000 square miles.

Given the speed of Amazon's shipments, the company could blanket the whole US in cardboard in about five months.

45,000 robots roam the floors of Amazon's warehouses

To help those shipments leave the warehouses on time, Amazon relies on a growing fleet of autonomous robots that fetch packages from their shelves and bring them to human employees.

The 45,000 robots live across 20 fulfillment centers in the US. In 2016, the company increased the fleet 50% from its prior head count of 30,000.

Amazon is more valuable than all major brick-and-mortar retailers combined

The sum total of those investments in infrastructure and supply chain management have made Amazon by far the most valuable retailer in the United States.

Amazon's $356 billion valuation is so big, it's larger than Wal-Mart, Target, Best Buy, Macy's, Kohl's, JCPenney, and Sears combined.

With the recent acquisition of Whole Foods, there are no signs the retailer has any plans of slowing down.



A Prime member can just walk in and get a great deal on a book they want to read immediately, but if you're a non-Prime member you're better off just ordering from the website and waiting for it to come.

That means the stores are just another benefit that Amazon has tacked on to its Prime benefits. The benefits for the $99 a year membership constantly expand and most recently includes Amazon Key, the program that lets Amazon deliver packages inside your home. It also includes the video streaming service Prime Video, the music streaming service Prime Music, the ebook service Prime Reading, Twitch Prime, and of course the infamous free two-day shipping.

Amazon is willing to invest heavily in attracting and maintaining Prime members because they tend to spend more on over the course of a year — nearly double what non-Prime members spend. They're also more loyal overall than non-Prime members, shopping twice as often. There's also evidence that suggests Prime members spend more on Amazon the longer they stay Prime members.

Giving customers a compelling reason to shop Amazon instead of another website is crucial as Amazon fends off competitors.

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