We have pulled the key Amazon 2023 stats and performance figures from CEO Andy Jassy’s 2023 Letter to Shareholders and it’s revealing, both to the growth of the Amazon marketplace and where brands and retailers need to focus their attentions.
Roughly 12% growth might be the headline rate, but it’s important to realise that Amazon are leaning heavily into both deals and advertising, coupled with faster than ever delivery speeds.
Advertising is the big standout with revenue rising from $38B in 2022 to $47B in 2023, that’s a 24% increase – double the growth of Amazon’s total revenue. What this means is that brands and retailers need to invest heavily in Sponsored Ads to get their products seen because if you don’t your competition will. I was speaking to a business only this morning who anecdotally told me that their organic page views are way down – that’s because if a competitor is investing in Sponsored Ads they’re grabbing a higher share of consumer views.
Advertising on marketplaces is here to stay, and not just on Amazon – just about every marketplace now has an optional advertising offering (compulsory on some marketplaces, but just about essential on all). Retailers really don’t have a choice so when figuring out your margins it’s no longer enough to allow for the headline selling fees – you need to add in on average somewhere in the range of 10-15% advertising fees on top.
Amazon 2023 stats and performance
Revenue
- Amazon’s total revenue grew 12% year-over-year (“YoY”) from $514B to $575B
- North America revenue increased 12% YoY from $316B to $353B
- International revenue grew 11% YoY from $118Bto $131B
- AWS revenue increased 13% YoY from $80B to $91B
Deals
- 2023, customers saved nearly $24B across millions of deals and coupons
- This is almost 70% more than the prior year
Prime
- 7 billion items arriving same or next day
- more than 4 billion in the U.S.
- more than 2 billion in Europe
- Amazon increased the number of items delivered same day or overnight by nearly 70% YoY.
- In 2023, for the first time since 2018, Amazon reduced their cost to serve on a per unit basis globally.
- In the U.S. alone, cost to serve was down by more than $0.45 per unit YoY
Advertising
- 24% YoY from $38B in 2022 to $47B in 2023, primarily driven by our sponsored ads
- Added Sponsored TV
- Expanded streaming TV advertising by introducing ads into Prime Video shows and movies
- Reach over 200 million monthly viewers
- Amazon convinced that Prime Video can be a large and profitable business on its own
One Response
I read a recent article elsewhere that said a large number of subscribers were cancelling after Amazon introduced ads to Amazon Video or you have to pay extra to get rid of them. Obviously Amazon denied that was the case, whether customers will cancel long term though I’m unsure. I suspect Prime Video is just a nice add on for most who pay for Prime for the delivery service.
Personally I find Amazon is more expensive than ebay, even with delivery costs added, so I rarely buy there, but again I suspect most people don’t necessarily look at the cost and more at the free delivery with Prime.