1/27/11

Amazon sales and profits boom in 2010

Total sales for the year and Q4 grew 40% and 36%, respectively.

Mark Brohan , Research Director

Amazon didn’t just put up strong financials in 2010. In baseball parlance, the world’s biggest online retailer tore the cover off the ball with a big jump in sales and an impressive increase in profits.

Net sales were $34.20 billion, a 39.5% increase from $24.51 billion last year. North American net sales totaled $18.7 billion, up 46.1% from $12.8 billion in 2009. North America accounted for 54.7% of sales in 2010.

What those figures mean is that Amazon almost certainly accounted for more than 10% of online retail sales in North America in 2010. Amazon’s $12.8 billion in 2009 North American sales represented 8.6% of the nearly $149 billion in online retail sales for that year reported by the U.S. Commerce Department and Statistics Canada, a government agency. With U.S. e-retail growth at just over 14% for the first three quarters of 2010, according to the U.S. Commerce Department, North American e-commerce is likely to total about $170 billion for 2010; Amazon’s $18.7 billion in North American sales would exceed 11% of that total. The Commerce Department will release its full-year 2010 estimate Feb. 17.

And Amazon’s remarkable growth in 2010 was not limited to North America. In fact, Amazon's 40% overall revenue growth rate in 2010 was the e-retailer's highest since 2000, company officials say.

For the year ended Dec. 31, Amazon, No. 1 in the Internet Retailer Top 500 Guide, reported: 

“We had our first $10 billion quarter, and after selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com,” says Amazon CEO Jeff Bezos. Kindle is Amazon’s electronic book reader.

For the fourth quarter:

Although Amazon continues a policy of not disclosing sales of Kindle and of Kindle-related content, digital readers and electronic books were a big reason Amazon’s top line boomed in the fourth quarter, says Bezos.

“Last July, we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected—and it’s on top of continued growth in paperback sales,” he says.

Amazon expects net sales in the first quarter to range from $9.1 billion to $9.9 billion and operating income to range from $260 million to $385 million.

Topics:

Amazon, Amazon.com, electronic books, financials, fulfillment, hardcover books, international e-commerce, Jeff Bezos, Kindle, music, North America, online book sales, paperbacks, Q4, Statistics Canada, U.S. Commerce Department, videos, web-only retailers

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