Amazon.com Inc. released its 2017 annual report on Wednesday, and it included a number of facts and figures broadly relevant to online retailers at large. Here’s a cheat sheet:
- For the first time, Amazon tied a membership figure to its Prime loyalty program. The retailer says it has more than 100 million Prime members around the globe. Prime is the paid program that gives members access to unlimited speedy delivery and a host of other benefits. Prime is available to consumers in 16 countries, including the recently added markets of Singapore, Luxembourg and the Netherlands. The cost of Prime and the benefits included vary by market. The company noted Prime membership signups in India exceed the number of signups in any other geography in the first year it was offered. Amazon launched Prime in India in mid-2016; a year’s membership costs the equivalent of about $15 in India. To provide a reference point, Amazon has 10 million more members than Costco Wholesale Corp. and 25 million fewer than Netflix Inc.
- Globally, Amazon has 2 million sellers listing goods for sale on its marketplace sites. Amazon also said 300,000 U.S.-based sellers joined the marketplace last year. (Another marketplace joiner is Best Buy Co. Inc., which separately announced a multiyear agreement with Amazon to sell a series of TV models with Amazon Fire technology built in. Best Buy will sell those TVs in its stores, on BestBuy.com and on Amazon as a third-party seller.) Cross-border sales activity grew more than 50% year over year in 2017 via Amazon’s Global Selling, a program that facilitates marketplace sales beyond a seller’s home country.
- Amazon spent $21.7 billion on shipping last year, a 33% increase from 2016. To put this amount into perspective, it is roughly double what the e-retailer spent on all marketing activities in 2017. Shipping costs include transportation costs and sortation and delivery center costs, excluding staffing expenses at its fulfillment centers. Amazon says it expects these costs to continue to rise as more customers take it up on its shipping offers. “We seek to mitigate the costs of shipping over time in part through achieving higher sales volumes, optimizing our fulfillment network, negotiating better terms with our suppliers and achieving better operating efficiencies,” the report notes.
- The annual report also shed some light on Amazon’s position on the online sales tax issue and the moves by states to individually demand the collection of tax in their jurisdiction. (The U.S. Supreme Court heard arguments related to this issue earlier this week. Read our coverage here.) In the United States, Amazon collects sales tax in all states that have sales tax on the products it sells itself. In its marketplace business, Amazon leaves it up to marketplace sellers to decide where they want Amazon to collect sales tax on the goods they sell on Amazon. A marketplace seller provides Amazon with its state tax IDs for the states where the seller wants to collect sales tax. Noting the case—now under review by the Supreme Court—may overturn the precedent that limits states’ rights to collect taxes from sellers with no in-state presence, Amazon says it supports a federal law that would allow states to require sales tax collection by remote sellers under a nationwide system. It also plans to continue to “defend ourselves vigorously” on an assessment issued in June 2017 by South Carolina demanding Amazon collect taxes on marketplace transactions made by marketplace sellers to South Carolina residents.
- Prime members can expect to get more out a visit to Whole Foods Market soon. Amazon, which acquired Whole Foods last summer, is working on a way to identify Prime members at Whole Foods checkout counters and will extend benefits to those shoppers. Separately, Whole Foods sent a notice to customers in its own loyalty program this week that the program will cease May 2.
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