For the first time, the amount of Amazon’s online retail merchandise is less than half of the company’s overall sales, according to GeekWire. Even if both businesses continue to grow, given the company’s history, which is a significant milestone, as evidenced by the growing diversity of the tech giant’s business, Amazon’s original mission of its online bookstore has slowly become the online “Everything Store” through decades.
In recent years, Amazon has gone beyond the role of a traditional e-commerce company to become a major player in all walks of life. Amazon today sits at the top of the competitive and lucrative cloud computing market through its Amazon web services business. Amazon is also a new force in the physical retailing of Whole Foods and its Amazon stores, as well as a heavyweight contender for the entertainment industry, a trendsetter in the shipping sector and a potential giant in advertising.
In recent years, these growing divisions have steadily become important contributors to Amazon’s overall business profits.
Still, online sales remain Amazon’s biggest business, larger than any other individual market segment. But for the first time in the first quarter, Amazon’s other market segments overtook Amazon’s own online sales. Amazon’s online merchandise sales were $29.5 billion, up 9.5 percent from a year earlier and accounting for 49.5 percent of Amazon’s quarterly net sales of $59.7 billion.
Third-party seller services account for the second largest business in the Amazon business, accounting for 19%. The area includes sales commissions from third-party sellers and Amazon’s fees for packaging and shipping orders, which earned $11.1 billion in the first quarter, up 20% from a year ago.
Amazon Network Services has changed the composition of the company, contributing a lot of revenue and profits. Cloud computing business accounted for 13% of Amazon’s business in the first quarter. AWS earned $7.7 billion this quarter, up about 41% from a year ago.
Physical Stores, led by the Whole Foods store portfolio, rose from 0% of Amazon’s business to 7% in the first quarter, never two years ago. Physical store revenue rose 1% to $4.3 billion a year earlier.
While online retailing is losing market share on Amazon itself, the company continues to dominate the broader field of e-commerce. Last year eMarketer expected Amazon to reach 49% e-commerce sales in 2018, up from 44% in 2017.