Over the years, Amazon has become a household name with a wide range of products and services available at your disposal. Amazon has managed to become an industry giant in just under 3 decades through rapid global expansion and acquisition of some of the best brands and websites. With revenue of a whopping $386 billion as of 2020 and a net income of over $21.331 billion, it has been successful in making its founder and ex-CEO, Jeff Bezos, the richest man in the world. Amazon and its rise were only possible to the vision and determination of Jeff Bezos. Let’s know How Does Jeff Bezos Make Money?
In 2017, Bezos became the first person to cross over $100 billion in net worth. But Amazon isn’t the only way Jeff Bezos generates income! We have mentioned a few other sources of income generated by Jeff Bezos in this article.
How Does Jeff Bezos Make Money?
The majority of Bezos’ net worth is tied to the stocks of Amazon. He currently owns over 10.3% shares of Amazon. Bezos primarily makes money through Amazon. As it has various arms, everything from entertainment to equipment. The worldwide 2021 Q2 sales just from Amazon.com have amounted to a total of $113 billion. Which is 27% more compared to last year’s Q2 sales.
With Amazon Prime Video overtaking the other OTT platforms with over $11.9 billion revenue last year alone, Bezos has made his mark in the entertainment field as well.
Bezos has various other business ventures, including:
- Blue Origin
- Washington Post
- Bezos Expeditions
- Altos Labs
Blue Origin
This is the most profitable venture for Bezos after Amazon. Bezos found Blue Origin in 2000, which primarily focuses on space exploration with an indication to reduce the cost of space travel. Blue Origin innovated various orbital launch vehicles. They also offer commercial spaceflight tickets starting from $200,000 to $300,000 per person.
Bezos Expeditions
Bezos found Bezos Expeditions in 2005. It is an investment firm to handles its investments. The firm has invested in various sectors ranging from seed stages to late-stage companies. Most of these investments include profitable companies like Twitter, Airbnb, Uber, Stack Overflow, Washington Post, Blue Origin, Business Insider, General Assembly, and many more. The above successful companies have raked Bezos billions due to his timely investments.
Altos Labs
Altos Labs was founded by Bezos and Mail.ru founder Yuri Milner in September of 2021. It is a Bio-technology company that aims to harness the reprogramming of cells, increasing the longevity of humans. The company includes various award-winning and prominent scientists like Steve Horvath and Nobel Prize winner Shinya Yamanaka who was responsible for the invention of cellular reprogramming in mammals.
Critics have been critical of this investment but knowing that it is founded by Bezos, it well could be the best innovation after the wheel.
Bezos Before Amazon
After graduating summa cum laude from Princeton University in B.S.E (Bachelors of Science in Engineering) majoring in electrical engineering and computer science with a 4.2 GPA, Bezos was offered jobs at Bell Labs, Intel, Accenture, and various other tech giants. But he chose to work at Fitel, a tech startup, where he was building networks for international trade. A few promotions later, he left to work in the banking industry where he was the product manager at the Banker’s trust.
Bezos transitioned to Wall Street in 1990 and joined D.E. Shaw & Co., a relatively new hedge fund, and worked there until 1994. In 4 years, Bezos was able to become the fund’s fourth senior vice president at a very young age of 30.
History of Amazon
Humble Beginnings
After leaving D.E. Shaw, Bezos wanted to establish his eCommerce website, due to the rise of the internet. Amazon was founded in July of 1994, by Jeff Bezos, operating from the garage of his house in Washington. It was named after the Amazon river, which is the biggest river in the world, as Bezos was inspired by it. A few months after establishing Amazon.com, it started generating up to $25,000 in sales per week. Three years later in 1997, Amazon announced its Initial Public Offering (IPO) at $18 per share, raising a whopping $54 million, making their IPO successful.
Moving ahead of Books and Rapid Expansion
In 1998, Amazon announced that they would be adding more than just books in their online catalog. They were also one of the first companies to offer free shipping on orders above a certain number. This lead to the rise in their users. In the same year, Amazon had planned to enter the Chinese market but their plans were halted due to the establishment of Alibaba by Jack Ma. A few years later, Amazon announced its first-ever profit. In 2004, Joyo, an online bookstore based in China was acquired for over $75 million, renaming it to Amazon China, hence foraying into the Chinese market. Amazon China was Amazon’s 7th regional website.
Multiple Successful Launches
In 2005, Amazon launched Amazon Prime, which offered free two-day shipping around the United States on eligible orders at an annual subscription of $79. They were further successful in launching Amazon Mechanical Turk in 2005, which allowed users to do perform human intelligence tasks such as transcribing or translating podcasts for a small wage.
In 2006, Amazon launched Amazon EC2 allowing their users to host websites using their infrastructure and API. In late 2006, Amazon made history by launching FBA (Fulfilled by Amazon), where small businesses can sell on Amazon using their delivery and customer assistance infrastructure. Amazon became one of the first companies to offer double the federal minimum wage to its employees.
Acquisitions by Amazon
Over the years, Amazon has made multiple acquisitions ranging in the fields of technology to the fields of entertainment. They have a keen eye when it comes to the potential success of a brand or a company. Sometimes, the value of a company is multiplied after getting acquired by Amazon. Their recent acquisition being MGM (Metro Goldwyn Mayer), for which they paid over $8.5 billion.
Some of their most notable acquisitions have been mentioned below.
IMDB (Internet Movie Database)
In the year 1998, Internet Movie Database, or simply IMDB became the first-ever company to be acquired by Amazon for a whopping 55 million dollars. Which was pretty much their valuation last year after their IPO. This shows great leadership and vision. IMDB is the largest repository for movie information and credits. IMDB is considered the go-to site for film buffs and cinephiles, also allowing subscriptions for users to contact the agents of Hollywood Megastars. Over the years, Amazon has seen a significant amount of ROI on IMDB thanks to their early acquisition.
Twitch
Twitch (formerly known as Justin. tv) is the largest live streaming platform, meant both for video game enthusiasts and content creators. Anyone can create an account to stream on Twitch, for free. Before it was even acquired, it had over 45 million viewers. In 2017, Twitch was acquired by Amazon for over $970 million in cash! Amazon has also integrated Amazon Prime into Twitch and has allowed users to “subscribe”(pay a certain amount to support the person live streaming) for free! There has been a rise in viewership ever since, with over 2.84 million concurrent viewers in 2020.
Zappos
Zappos saw revenue growth, initially from $1.6 million in 2001 to over $1 billion in 2008. Amazon quickly acquired Zappos the next year for over $1.2 billion in stock. The revenue number since the acquisition has since doubled, reaching over $2 billion in 2015. The company has been one of the largest retailers for shoes of all types, ranging from sneakers to sports shoes, formal shoes, and even vegan shoes!
Whole Foods Market
In June of 2017, the high-end grocery store chain Whole Foods Market was acquired by Amazon for over $13.7 billion. Whole Foods Market has branches all over the country and has expanded outside in the United Kingdom and Canada. This not only was a great investment for Amazon, but it also saw a decline in the stocks of its competitors like Walmart, Costco, and Target. This was Amazon’s first acquisition in the grocery department. The annual revenue of Whole Foods Market has since seen a stark increase, reaching over $15 billion in 2020.
Conclusion
Amazon is undoubtedly the biggest force in the e-commerce industry. Multiple investments and acquisitions along with great conviction and grit have made its founder and ex-CEO Jeff Bezos, the richest man on this planet. The major credit behind the success of Amazon is given to Bezos. From leaving a well-paying job and the post of president at a new hedge fund to starting a multi-billion dollar company, Bezos is responsible for the global boom in e-commerce and is inspiring millions of people all around the globe.
Bezos further is planning to explore space and colonize the solar system with his Blue Origin venture which he established in 2000. In July 2021, Bezos launched the NS-16 mission reaching outer space. Blue Origin also provides commercial spaceflight tickets. With even the other planets in process of being colonized, not even the sky is the limit for Bezos.