{"id":34121,"date":"2025-07-11T15:47:46","date_gmt":"2025-07-11T15:47:46","guid":{"rendered":"https:\/\/financialrush.com\/?p=34121"},"modified":"2025-07-11T15:47:46","modified_gmt":"2025-07-11T15:47:46","slug":"amazons-annual-deal-fest-is-no-longer-all-about-the-bargains","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=34121","title":{"rendered":"Amazon\u2019s annual deal fest is no longer all about the bargains"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=323f659e-a9f2-4960-940e-e038834f97f6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Amazon Prime Day is often referred to as Black Friday in July. For good reasons. What started out as a one-day event back in 2015 for shoppers to snag discounts on big-ticket items has morphed into an annual extravaganza that is widely copied by other retailers.<\/p>\n<p>Last year\u2019s Prime Day generated about $13.4bn in gross merchandise value over a 48-hour period, according to Bank of America. That\u2019s a 10 per cent increase on 2023 and represents about 6 per cent of Amazon\u2019s online store sales in 2024.<\/p>\n<p>This time round, Prime Day arrived amid concerns that sales would not match the spectacular highs of past years. Consumers are decidedly more cautious. Sellers, facing tariffs, have less reason to offer large discounts. And competition from other retailers \u2014 namely Walmart \u2014 has increased. <\/p>\n<p>Direct comparison is made trickier this year because Prime Day stretches out over four days instead of two. But in any case, zooming in on sales misses the point. Amazon Prime, and the annual deal bonanza that celebrates it, isn\u2019t just a way of shifting goods, so much as a means of feeding the enormous Amazon ecosystem.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A5bed35fc-8951-45f3-8ddf-41be4fc2cd57?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A5bed35fc-8951-45f3-8ddf-41be4fc2cd57?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A5bed35fc-8951-45f3-8ddf-41be4fc2cd57?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A5bed35fc-8951-45f3-8ddf-41be4fc2cd57?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A5bed35fc-8951-45f3-8ddf-41be4fc2cd57?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab93001ef-54fe-48f2-a2e7-e76af68171bd?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab93001ef-54fe-48f2-a2e7-e76af68171bd?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab93001ef-54fe-48f2-a2e7-e76af68171bd?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><\/picture><\/figure>\n<p>First, the sales themselves have a relatively modest impact on the company\u2019s bottom line. Amazon\u2019s ecommerce business may be massive, with revenue accounting for about 39 per cent of the company\u2019s total last year. But operating profit margins \u2014 at 5.4 per cent, Bank of America estimates \u2014 are slim.<\/p>\n<p>The real money is therefore in driving customers to all its other businesses.\u00a0These include Prime membership sign-ups, which give more than 300mn subscribers access to deals others don\u2019t get, plus free shipping and other benefits, in return for an annual fee. <\/p>\n<p>More members mean more spending on Amazon\u2019s marketplace and greater consumption of its services and contents such as video streaming, music and AI-powered assistant Alexa.<\/p>\n<p>Advertising \u2014 which Bank of America assigns a chunky 55 per cent profit margin \u2014 also gets a boost as brands and third party vendors vie for visibility on one of the biggest sales days of the year. It\u2019s a virtuous circle. The more shoppers Amazon can get on its website, the more data it has to take to advertisers to help them create targeted ads. <\/p>\n<p>Prime Day also tends to attract new third-party sellers, a group that already accounts for <a href=\"https:\/\/www.aboutamazon.com\/news\/small-business\/amazon-2024-small-business-empowerment-report\" data-trackable=\"link\">60 per cent<\/a> of Amazon\u2019s retail sales. Fees collected for services like storing inventory and handling logistics for orders have become Amazon\u2019s second biggest business, generating over $156bn in revenue last year.<\/p>\n<p>The real crown jewel now is Amazon Web Services, the company\u2019s cloud business, which makes up nearly 60 per cent of last year\u2019s operating profit. Put its $126bn of estimated revenue this year on the same 11-times multiple as rival Microsoft, and it\u2019s worth $1.4tn, or over 57 per cent of Amazon\u2019s entire enterprise value. Prime Day may be good business, but it\u2019s no longer the main event.<\/p>\n<p><a href=\"https:\/\/www.ft.com\/content\/mailto:pan.yuk@ft.com\" data-trackable=\"link\">pan.yuk@ft.com<\/a><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/323f659e-a9f2-4960-940e-e038834f97f6\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this&hellip;\n","protected":false},"author":7,"featured_media":34122,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-34121","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tech","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34121","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34121"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34121\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/34122"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}