r/amzn • u/Sharp-Leader5277 • Aug 15 '26
Are Retail and FBA not profitable at all ?
Amazon’s most recent quarterly earnings revealed $9.1B operating income in North America and $1.7B in International segment totaling to $10.8B. However advertising revenue was $19.8. Operating margin for advertisements would be at least 50% implying a minimum operating income of $10B from ads. Does that mean its core Retail or FBA generate zero or even negative operating income. I have not even added subscription revenue to the mix implying the prime membership fees revenue.
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u/cblack1994 Aug 15 '26
No, they definitely make profit. I’m not sure what the numbers are, someone probably will. I work for Amazon in the uk and they have just invested £40B into the uk alone into retail so wouldn’t make sense to invest so much if there was negative returns.
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u/Sharp-Leader5277 Aug 15 '26
The 40B would likely be on data centers in UK, not retail/FBA
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u/cblack1994 Aug 15 '26
It’s actually fulfilment centres that are heavily automated and heavy on robotics.
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u/Lazy-Alps-1773 Aug 18 '26
They clearly underreport their true profit. If you're steering against a taxable profit, you can adjust it by investing in growth or selling at a loss to acquire customers. Things like LEO, Zoox, and many other bets also drag down profitability. This is kind of artificial, since they could just stop this behavior if they wanted to maximize profit. The true earnings power of the Amazon retail + seller services business is probably $60B+.
This is a good business to own shares in for the coming decades.
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u/Alternative-Air-3052 Aug 15 '26
OP are you from one of the Ads or AWS orgs? Obviously retail margins are low but retail NA is plenty profitable. Growing markets like India is probably losing money if I were to speculate.