uploads///Amazons revenue growth

How Does Amazon Keep Reporting Such Sizzling Sales?


Aug. 26 2016, Updated 11:06 a.m. ET

Strong sales trends at Amazon

Amazon.com (AMZN) is one of those companies that keeps reporting strong sales, despite rising competition and tough comparables. The company’s revenue growth trend looks encouraging, as you can see in the chart below, thanks to the stellar performance of e-commerce sales and its cloud computing business.

The popularity of Amazon’s Prime membership in local and international markets has had a positive impact on its top-line performance, and it provides a competitive edge over retailers such as Wal-Mart (WMT), eBay (EBAY), Target (TGT), and Macy’s (M). Moreover, Amazon continues to witness increased unit sales on account of quick delivery, low prices, and enhanced offerings.

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What’s driving Amazon’s strong growth?

Amazon’s customer-centric business model, its long-term approach to growth, and its expansion of its business and offerings have all helped the company evolve as the market leader in the e-commerce space. The company has increased investments in the right areas and has expanded into emerging markets to generate higher growth, and this strategy has paid off well. A growing number of third-party sellers on Amazon Marketplace and the popularity of its Prime membership program are the primary drivers behind the company’s flourishing sales growth.

Meanwhile, Amazon’s cloud business, Amazon Web Services, has been growing at an astounding rate because the company has been successfully managing and growing this segment, despite tough competition from other large tech firms.

In the next part, we’ll take a closer look at Amazon’s margins.


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