Amazon is increasingly looking more like a services company than a retailer, with businesses such as Fulfillment by Amazon (FBA), Amazon Web Services (AWS), subscriptions, and advertising accounting for a growing share of the company’s overall revenue.
In the second quarter, services accounted for 37% of Amazon’s global net sales, up from 33% one year ago. Amazon’s fastest-growing services are subscriptions (including fees generated from Prime memberships) and “other,” which both grew 53% year-over-year in the second quarter.
The “other” bucket, which includes advertising, is nearly a $1 billion-per-quarter business, which is more than Snapchat’s forecasted ad revenue for all of 2017. Amazon is also reportedly working on its own social messaging app, which could further accelerate digital advertising revenue.
Services continue to be areas of growth and diversification for Amazon while complementing its core e-commerce business.
Meanwhile, Amazon continues to outperform other retailers with its retail products division (including sales of merchandise and digital media content) growing 18% year-over-year to $23.8 billion in the second quarter.