Amazon’s sales rise 23%, propelled by service sales gains
October 22, 2015 05:16 PM
Amazon.com Inc. has pulled in $25.36 billion in revenue in the third quarter, up 23.2% from $20.58 billion a year earlier. Almost three-fourths of that revenue (72.8%) came from the sale of products on Amazon sites globally, down from 77.8% in Q3 2014. That change reflects significant gains the company has made in selling services, such as computing power, and in commissions taken on units sold by sellers on the Amazon marketplace, which rose as a percentage of total units sold in the quarter.
Merchants selling through the Amazon.com marketplace accounted for 46% of units sold versus 42% a year earlier and up from 45% in Q2 of this year.
Amazon’s own product sales totaled $18.46 billion, up 15.2% from $16.02 billion in Q3 2014. Services sales, meanwhile, contributed $6.90 billion, up 51.3% year over year from $4.56 billion. That included a 78.4% increase in revenue from Amazon Web Services, from $1.169 billion in the third quarter of 2014 to $2.085 billion in the most recent period.
In North America, Amazon's sales were up 28.3% to $15.006 billion from $11.699 billion a year earlier. That's despite relatively modest growth in such media products as books and music, which increased only 8.4% to $2.963 billion from $2.734 billion. Sales of all other items, what Amazon calls "electronics and other general merchandise," jumped 34.7% in North America to $11.840 billion from $8.793 billion.
Amazon posted a profit of $79 million for the quarter, and $114 million in net income for the first nine months of 2014.
Looking ahead to the critical Q4 selling season, Amazon says it expects to generate sales of between $33.50 billion and $36.75 billion, a gain of between 14% and 25% versus a year earlier. It plans to hire 140,000 people globally across its fulfillment network to support those sales.
For the third quarter ended Sept. 30, Amazon reported:
- Net worldwide sales of $25.36 billion, up 23.2% from $20.58 billion during the same period last year. Were it not for an unfavorable fluctuations in foreign currency values, Amazon says global sales would have been up 30% in the quarter.
- Net product sales, or products sold by Amazon itself, accounted for $18.46 billion of total sales, up 15.2% from $16.02 billion.
- Net service sales grew 51.3%. Such sales include commissions from outside merchants that sell on Amazon marketplaces, the Amazon Web Services cloud computing service and other smaller revenue sources and account for the remainder of Amazon’s total net sales. Net service sales were $6.90 billion, up from $4.56 billion during Q3 2014.
- International net sales were $8.27 billion, up 7.3% from $7.71 billion during the same period last year. International sales accounted for 33.8% of the company’s overall sales compared to accounting for 37.5% of the company’s overall sales during the same period last year.
- Net income of $79 million versus a loss of $437 million in Q3 2014.
- Sales of electronics and other general merchandise in North America were $11.84 billion, up 34.7% from $8.79 billion.
- Media sales in North America were $2.96 billion, up 8.4% from $2.73 billion during the same period last year.
Through the first nine months of 2015, Amazon reports:
- Net global sales were $71.26 billion, up 19.4% from $59.66 billion.
- Net product sales accounted for $52.65 billion, up 12.1% from $46.98 billion.
- Net service sales of $18.61 billion, up 46.8% from $12.68 billion.
- Net income of $114 million versus a loss of $455 million.
Amazon is the leading e-retailer in North American sales and No. 1 in the Internet Retailer 2015 Top 500 Guide.