Sales for Amazon surged passed $200 billion in 2018, increasing 31% to $232.9 billion, compared with $177.9 billion in 2017. Operating income in the year tripled, to $12.4 billion, compared with an operating income of $4.1 billion in 2017.
Among the many reasons cited for the big 2018 financial gains was the performance of Amazon’s third-party sellers. More than 50% of units sold on Amazon over the holidays were from third-party sellers, and third-party sales are growing faster than first-party sales, Amazon said. Third-party sales of books has been a growing concern for authors, publishers, and booksellers since the company allowed third-party sellers to “win” the buy button on its book pages, and there are questions about where the resellers acquire their titles.
Revenue at Amazon’s cloud service unit, AWS, jumped 47% in the year, to $25.6 billion, and delivered operating income of $7.3 billion. Sales in Amazon’s North American division rose 33%, to $141 billion, and it also had operating income of $7.3 billion. The company’s international operations lost $2.1 billion.
The company’s report on its bookselling and publishing businesses was limited to repeating an earlier statement asserting that in 2018, authors earned more than $260 million from the Kindle Direct Publishing Select Global Fund. Amazon also noted that “hundreds of thousands of authors have self-published millions of books through KDP since launching the service in 2007.” More than a thousand authors surpassed $100,000 in royalties in 2018 through KDP, Amazon added.
Amazon’s employment practices, especially for hourly workers, have often been criticized by company critics, and the year-end press release tried to address that issue that by noting that its $15 hourly minimum wage went into effect in the U.S. on November 1 for all full-time, part-time, temporary, and seasonal employees. Amazon said the new minimum wage will benefit more than 250,000 employees in the U.S. After announcing the increase in the minimum wage, Amazon said that it received a company record of approximately 850,000 work applications for hourly positions in the U.S. in October 2018.
Raising the minimum wage will not impact Amazon’s bottom-line, however. In looking at the first quarter of 2019, the company said it expects operating income to jump between 21% to 74% over last year’s first period, on a sales increase of 10% to 18%.
