July 26, 2011, 4:51 PM

Sales jump 51% for Amazon

Web sales exploded again for the world’s largest online retailer.

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Web sales exploded once again for Amazon.com Inc. in the second quarter. But increased spending on marketing and fulfillment also caused the world’s largest online retailer’s net income to drop.

For the second quarter ended June 30, Amazon, No. 1 in the Internet Retailer Top 500 Guide, reported: 

  • Total sales increased 50.8% year over year to $9.91 billion from $6.57 billion.
  • North American sales increased year over year 50.4% to $5.40 billion from $3.59 billion. North America accounted for 54.5% of sales in Q2 2011.
  • International net sales totaled $4.50 billion, up 51.5% from $2.97 billion in the second quarter of 2010. International accounted for 45.4% of sales in Q2 2011.
  • Worldwide sales of books, music and videos increased 27.1% to $3.66 billion from $2.88 billion while electronics and other merchandise increased 69.3% to $5.89 billion from $3.48 billion.
  • Net income decreased year over year 7.7% to $191.0 million from $207.0 million.
  • Spending on marketing increased 61.6% to $341.0 million from $211.0 million in Q2 2010. Marketing expenses accounted for 3.4% of net sales.
  • Spending on technology and content increased 71.1% to $698.0 million from $408.0 million in the second quarter of 2010. Technology expenses accounted for 7.0% of net sales.
  • Spending on fulfillment increased 61.7% to $941.0 million from $582.0 million in Q2 2010. Fulfillment expenses accounted for 9.5% of net sales.
  • General and administrative spending rose year over year 46.9% to $166.0 million from $113.0 million in Q2 2010. General and administrative spending accounted for 1.7% of net sales.

"Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade," says CEO Jeff Bezos.

For the first two quarters:

  • Net sales were $19.77 billion, a 44.3% increase from $13.70 billion in the first quarters of 2010.
  • North American net sales totaled $10.87 billion, up 47.5% from $7.37 billion. North America accounted for about 55% of sales in the first two quarters 2011.
  • International net sales totaled $8.90 billion, up 40.6% from $6.33 billion in the first two quarters of 2010. International accounted for about 45% of sales in the first two quarters of 2011.
  • Worldwide sales of books, music and videos increased about 21.0% to $7.62 billion from $6.30 billion while electronics and other merchandise increased 64.0% to $11.48 billion from $7.0 billion.
  • Net income decreased year over year about 22.6% to $391.0 million from $505.0 million in in the first two quarters of 2010.
  • Spending on marketing increased about 61.9% to $667.0 million from $412.0 million. Marketing expenses accounted for 3.37% of net sales.
  • Spending on technology and content increased about 65.6% to $1.28 billion from $773.0 million in the first two quarters of 2010. Technology expenses accounted for about 6.5% of net sales.
  • Spending on fulfillment increased about 59.3% to $1.80 billion from $1.13 billion. Fulfillment expenses accounted for around 9.1% of net sales.
  • General and administrative spending rose year over year to $300.0 million from $210.0 million in the first two quarters of 2010, an increase of around 42.9%. General and administrative spending accounted for about 1.5% of net sales.

Amazon expects net sales in the third quarter to range from $10.3 billion to $11.1 billion and operating income to range from $20 million to $170 million.

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