Gone are the days when Amazon (NASDAQ: AMZN) was just a breakeven company surrounded by doubts that it would ever be profitable.
Today the company is an absolutely profitable machine. Amazon ended 2020 with net income of $ 21.3 billion, making it one of the most profitable companies in the world. In the first quarter of this year, Amazon posted a net profit of $ 8.1 billion, setting a new quarterly record. With a net margin of 7.5%, the quarter was also its highest profit margin in more than a decade.
These results are no accident. They are the result of years of investment, a reputation for high levels of customer satisfaction, and building a range of competitive advantages that high-growth, high-margin companies have unlocked.
While there is currently no doubt about Amazon’s profit potential, the margin will continue to grow. Here are three reasons why.