M+E Daily

As an AWS Cloud Consulting Partner, we deal a lot with Amazon’s cloud business. AWS does stand for Amazon Web Services, and while this portion of the business does represent a whopping 50.4 percent of profits, it’s their e-commerce platform that most of us interact within our day-to-day.

As it relates to Amazon, I don’t think many of us would be surprised to know they are the number one seller online in the USA, but here are some facts:

• American households average more than one Amazon Prime Membership per household.
• Amazon employs one in every 169 workers in the United States.
• Half of all USA e-commerce is projected to be via Amazon this year.

USA households average more than one Amazon Prime Membership per household

For those who don’t know, Amazon sells an annual subscription called Prime, which provides discounts on shipping, streaming benefits for $119 per year. As of June 2021, 153 million Americans have an Amazon Prime Membership. Given that the entire adult population of the United States is 258 million (there are 333 million people total), that means almost 60 percent of American’s have a Prime membership.

What’s more impressive is that the number of Prime Memberships is greater than the number of U.S. households, which is estimated at 122.8 million.

Therefore, the United States averages 1.24 Amazon Prime Memberships per household.

Amazon employs one in every 169 workers in the United States

If you know more than 169 people in the USA, chances are at least one of them works for Amazon. Globally, they are the world’s second-largest employer, right behind Walmart, employing a staggering 1,298,000 people. This is up by over 280 percent since 2016 when they employed only 341,000 people. As impressive as this is, it likely understates their impact, as more than 50 percent of the goods sold on Amazon come from 3rd parties.

While we are not technically Amazon workers, we at Metal Toad deal with and sell their products every day, alongside thousands of other AWS partners and suppliers.

Half of all U.S. e-commerce is projected to be via Amazon this year

While I don’t think this is particularly shocking to most Americans, it probably should cause more concern than it does. And while this is a predicted number, the growth has been pretty steady since 2016.

Taking a moment to look at the Chinese market, an economy well-known for government-backed monopolies, the largest e-commerce retailer there, Alibaba, also controls 50 percent of the overall market share. However, in China the number No. 2 (JD.com) holds 16.9 percent, and No. 3 (Pinduoduo) is at 13.2 percent. In the United States, nobody else is even in double digits.

Here are the 2020 numbers:

Amazon 40.4 percent
Walmart: 7.1 percent
eBay: 4.3 percent
Apple: 3.7 percent
Best Buy: 2.2 percent

As it relates to global e-commerce market share, Amazon is number three in the world. However, by revenue (when you factor in AWS, Whole Foods, and other AWS revenue generators) Amazon is by far the largest e-commerce company in the world. Their revenue was last reported at $386.06 billion, leaving No. 2 (Jindong) at $114.97 billion and No. 3 (Alibaba) at $71.99 billion, behind in the dust.

Takeaways

So should we all stop buying on Amazon? Even if told you to, I doubt you would. Like everyone else, I am a creature of habit, and I enjoy the simplicity of a simple Amazon search followed by a “buy now” button click. However, I have noticed lately that a little shopping around can greatly reduce costs.

When shopping for a corkboard recently for my home office, Amazon was the number one result in Google, and I found exactly what I was looking for priced at around $26 — with the beautiful Prime logo. Not a crazy amount, but I had a few minutes, so I expanded my search and found that the same corkboard was listed on Walmart for $9 (shipping included). That’s a huge difference! Both were identical, manufactured in the same place, and would arrive at my home on the same day. So, I went with the underdog: Walmart.

To be clear, I am not making any comments around sustainability, shipping, packaging, carbon emission, reduced employment, labor practice, or any host of problems that we can/should consider when making our purchases. For many, what we buy boils down to two simple things: No. 1 convenience and No. 2 price. While other e-tailers can compete on price, nobody else even comes close when it comes to convenience.

By Joaquin Lippincott, CEO, Founder, Metal Toad