🚨 #Amazon beats revenue and margin targets in strong Q3 earnings report. Here's everything you need to know:

𝗧𝗗𝗟𝗥;
Amazon convinced shareholders with another strong quarter across its Retail, 3P Seller Services, AWS, and Advertising divisions:

🚀 Net Sales grew to $158.9bn (+11% / +$15.8bn YoY)
💰 Operating Income grew to $17.4bn (+11% / +$6.2bn YoY)
📢 Advertising grew to $14.3bn (+19% / +$2.27bn YoY)

𝗤𝟰 𝗚𝘂𝗶𝗱𝗮𝗻𝗰𝗲
🔺 Net Sales expected to reach $181.5 bn - $188.5 bn (+7% to +11% YoY)
🔺 Operating Income predicted to grow to $16 bn - $20 bn

𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀
As shoppers remain price-sensitive, Amazon doubles down on what it does best: Running big sales events and improving fulfilment speed to consumers.

With one caveat:

The tech giant remains focused on protecting its bottom line, prioritising operational efficiencies in its retail division. The recent termination of small vendor accounts is just the tip of the iceberg.

CEO Andy Jassy has made it clear that improving the cost of serving shoppers remains a NorthStar metric for Amazon. Affecting CPG brands selling low ASP items the most, since these products often act as a gateway to getting shoppers through the (virtual) door.

With the rise of Asian-based rivals from Temu, Shein, & Co., Amazon knows that unlocking these economies of scale becomes a competitive advantage:

» 𝗜𝗳 𝘁𝗵𝗲 𝗼𝗻𝗹𝗶𝗻𝗲 𝗿𝗲𝘁𝗮𝗶𝗹𝗲𝗿 𝗰𝗮𝗻 𝗼𝗳𝗳𝗲𝗿 𝗮 𝗹𝗼𝘄-𝗽𝗿𝗶𝗰𝗲𝗱 𝗰𝗮𝘁𝗮𝗹𝗼𝗴𝘂𝗲 𝗮𝘁 𝘀𝗰𝗮𝗹𝗲 𝗮𝗻𝗱 𝗽𝗮𝗶𝗿 𝗶𝘁 𝘄𝗶𝘁𝗵 𝘀𝗮𝗺𝗲-𝗱𝗮𝘆 𝗼𝗿 𝗻𝗲𝘅𝘁-𝗱𝗮𝘆 𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝘆, 𝗔𝗺𝗮𝘇𝗼𝗻 𝗲𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲𝗹𝘆 𝘀𝗲𝗰𝘂𝗿𝗲𝘀 𝗶𝘁𝘀 𝗽𝗹𝗮𝗰𝗲 𝗮𝘀 𝘁𝗵𝗲 #𝟭 𝗯𝘂𝘆𝗶𝗻𝗴 𝗱𝗲𝘀𝘁𝗶𝗻𝗮𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝘀𝗵𝗼𝗽𝗽𝗲𝗿𝘀. «

As a result, the declining 1P sales share of 40% vs 60% for 3PS is a feature. Not a bug. It allows Amazon to go after the biggest opportunity (i.e., category-critical selection) and let 3P brands self-serve the rest.

So if you think that Amazon will let go of its profit focus anytime soon, you may want to re-adjust your plans for 2025.

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