Amazon started in a garage in Bellevue, Washington in 1994 as an online bookstore. Today it’s the largest company in the world by revenue — generating $717 billion in 2025 — with a market capitalisation of approximately $2.5 trillion and operations spanning e-commerce, cloud computing, streaming, advertising, logistics, grocery, and artificial intelligence.
The question of why Amazon is so famous isn’t a simple one. It’s not just that it sells everything. It’s that it has repeatedly entered entirely different industries and become dominant in almost all of them — often in ways that have permanently changed how those industries work.
Here’s a breakdown of Amazon’s major businesses, why each one matters, and what makes the company as a whole almost impossible to compete with.
Amazon’s Origin — From Books to Everything
Amazon was founded by Jeff Bezos on July 5, 1994. It started as a website selling books — books were chosen because they were easy to ship, came in a standardised format, and existed in almost infinite variety. Within a year, Amazon was selling books to customers in all 50 US states and 45 countries.
From books, Amazon expanded steadily: music and DVDs in 1998, electronics and toys in 1999, third-party marketplace sellers in 2000, Amazon Web Services in 2006, Kindle in 2007, Prime Video in 2011, grocery through Whole Foods in 2017, and on and on. Each expansion followed the same logic: find a market where the customer experience is poor, build something dramatically better, use Amazon’s scale to do it more cheaply than anyone else.
Amazon’s Major Services — What Makes It So Dominant
1. Amazon Shopping — The World’s Largest Online Store
Amazon’s e-commerce platform is the starting point for most people’s experience with the company. It’s the world’s largest online retailer, with hundreds of millions of products available from Amazon itself and from third-party sellers who list on the marketplace (third-party sellers now account for over 60% of units sold on Amazon).
What makes Amazon Shopping work so well for customers:
- Vast product selection across virtually every category
- Competitive pricing with real-time comparison
- Customer reviews at scale — billions of verified reviews across products
- Reliable delivery with increasingly fast options (same-day in many cities)
- Easy returns and straightforward customer service
- One-click purchasing and saved payment methods that reduce checkout friction
For Prime members, the shopping experience is further enhanced with free delivery on eligible items, exclusive deals, and early access to major sale events like Prime Day.
2. Amazon Prime — The World’s Most Successful Subscription
Amazon Prime, launched in 2005 at $79/year for unlimited two-day shipping, has become one of the most consequential subscription products in business history. It now has over 200 million members worldwide and generates approximately $43 billion in annual subscription revenue.
What Prime members get:
- Free and fast delivery on millions of eligible items — including same-day delivery in many major cities
- Prime Video — unlimited streaming of movies, TV shows, and Amazon Originals
- Prime Music — ad-free music streaming with 100+ million songs
- Prime Reading — access to thousands of e-books and magazines at no extra charge
- Prime Gaming — free games and in-game content monthly
- Early access to deals — exclusive access to Lightning Deals and Prime Day sales before non-members
- Prime Photos — unlimited photo storage
The genius of Prime is what it does to behaviour: Prime members spend approximately $1,400 per year on Amazon, compared to around $700 for non-members. Once someone pays for Prime, they naturally tend to buy more from Amazon to get the value from their membership — creating a self-reinforcing loop that’s extremely difficult for competitors to break.
3. Prime Video — Streaming That Rivals Netflix
Prime Video is Amazon’s streaming service — and it’s genuinely competitive at the highest level. With 240 million viewers in 2025 and Amazon spending $22.4 billion on content, it produces some of the most-watched shows and films in the world.
Amazon Originals like The Boys, Reacher, The Rings of Power, and Fallout have become global cultural touchpoints. Prime Video also holds exclusive sports rights in several markets, including Thursday Night NFL Football in the US.
Unlike Netflix, Prime Video comes bundled with Prime membership — meaning Amazon doesn’t need to justify the cost of its content investment with subscription revenue alone. The content serves partly as a reason to keep paying for Prime, which in turn drives more shopping. Prime Video has also begun running ads (in 2024), creating an additional revenue stream.
4. Amazon Music — 100 Million Songs, Ad-Free
Amazon Music gives Prime members access to an ad-free streaming catalogue of over 100 million songs, along with podcasts and music videos. It had 82 million listeners in 2025, making it a credible third player in music streaming alongside Spotify and Apple Music.
For casual listeners who already have Prime, Amazon Music is a compelling alternative to paying for a separate Spotify subscription — which is exactly the point.
5. Amazon Web Services (AWS) — The Hidden Engine of the Internet
This is the Amazon business most people have never thought about — and it’s the most profitable and strategically important one the company has.
AWS is the world’s largest cloud computing platform, providing computing power, storage, databases, AI/ML tools, and hundreds of other services to businesses, governments, and developers on a pay-as-you-go basis. It generated $107+ billion in revenue in 2024 — more than Apple’s Mac and iPad divisions combined — with an operating margin of over 37%.
If you’ve used Netflix, Airbnb, LinkedIn, Spotify, or virtually any major web service in the last decade, you’ve almost certainly used AWS infrastructure without knowing it. AWS holds approximately 31% of the global cloud market — the largest share of any provider, ahead of Microsoft Azure (24%) and Google Cloud (12%).
Why does this matter for understanding Amazon? AWS’s profits effectively subsidise Amazon’s willingness to run its retail operations at thin margins. The cash AWS generates gives Amazon the financial flexibility to invest aggressively in new areas — logistics, AI, health, satellites — that competitors simply can’t afford to match.
6. Amazon Advertising — A $68 Billion Business
Amazon has built one of the world’s largest digital advertising platforms — one most people don’t notice because it’s embedded in the shopping experience. When you search for a product on Amazon and the top results say “Sponsored,” those are paid placements from brands competing for visibility.
Amazon advertising generated $68.5 billion in 2025 — more revenue than YouTube’s advertising business. The reason brands pay so willingly is intent: people on Amazon are actively looking to buy something, making Amazon ad placements some of the highest-converting inventory in digital advertising.
7. Alexa and Echo — The Voice Assistant in 500 Million Devices
Amazon’s Alexa voice assistant, launched with the Echo smart speaker in 2014, was one of the first mainstream voice-controlled devices and established Amazon as a leader in smart home technology. Alexa is now embedded in hundreds of millions of devices — Echo speakers, Fire TVs, third-party products, and cars.
More practically, Alexa is deeply integrated with Amazon shopping: “Alexa, order more coffee” is one of the most frictionless purchasing experiences ever built. Every Alexa purchase feeds back into Amazon’s retail and Prime ecosystem.
8. Kindle — The Device That Saved (and Changed) Publishing
The Kindle e-reader, launched in 2007, sold out within five and a half hours of going on sale and is widely credited with saving the book industry from digital piracy while creating the modern e-book market. Amazon is now the world’s largest book retailer — physical, digital, and audio.
Kindle Unlimited (a subscription for unlimited e-book access) and Audible (audiobooks, owned by Amazon) complete a reading ecosystem that keeps millions of readers locked into Amazon’s platform for their entire book-buying lives.
Amazon in Numbers (2025)
- Annual revenue: $717 billion — the largest company in the world by revenue
- Market capitalisation: ~$2.5 trillion
- Net profit: $77.6 billion
- AWS revenue: $107+ billion
- Advertising revenue: $68.5 billion
- Prime members worldwide: 200–260 million
- Prime Video viewers: 240 million
- Employees worldwide: ~1.55 million
Why Amazon Is So Hard to Compete With
Amazon’s durability as a business comes from three structural advantages that reinforce each other:
The flywheel: More customers attract more sellers, which creates more selection, which attracts more customers. Lower prices (enabled by scale) bring more customers. More traffic funds lower prices. The flywheel is self-reinforcing and has been spinning for 30 years.
Cross-subsidisation: AWS’s enormous profits give Amazon the financial ability to compete aggressively in retail, media, and new industries at margins that would be unsustainable for any standalone retailer. Walmart can’t afford to lose money on delivery the way Amazon can, because Walmart doesn’t have an AWS.
Data advantages: Amazon knows what hundreds of millions of people buy, search for, return, and browse. This data makes its advertising more effective, its product development more informed, its logistics more efficient, and its AI development more powerful than almost anyone else.
Frequently Asked Questions About Amazon
Q: Is Amazon Prime worth it?
A: For regular online shoppers, almost certainly yes. The combination of free delivery, Prime Video, Prime Music, and Prime Gaming typically offers more value than the membership cost for anyone who shops more than a few times per month. The annual plan is significantly cheaper than monthly billing.
Q: What is Amazon Web Services (AWS)?
A: AWS is Amazon’s cloud computing division — it provides computing, storage, databases, and other IT infrastructure to businesses and developers over the internet. It’s the largest cloud platform in the world and Amazon’s most profitable business by a significant margin.
Q: How does Amazon make money if its retail margins are so thin?
A: Amazon’s retail business operates at thin margins by design — the goal is to attract customers and lock them into the ecosystem. The real profit engines are AWS (which has 37%+ operating margins), advertising ($68.5B in revenue), and Prime subscriptions. These high-margin businesses fund Amazon’s willingness to compete aggressively in lower-margin areas.
Q: Who is Amazon’s biggest competitor?
A: It depends on the business. In e-commerce: Walmart, Flipkart, and Alibaba. In cloud computing: Microsoft Azure and Google Cloud. In streaming: Netflix, Disney+, and Apple TV+. In advertising: Google and Meta. Amazon’s unusual position is that it competes across multiple industries simultaneously — which is part of what makes it so hard for any single competitor to truly challenge it.
Conclusion
Amazon is famous not because it does one thing exceptionally well, but because it has built an interconnected set of businesses — retail, cloud, media, advertising, logistics, AI — where each one makes the others stronger. The shopping platform drives Prime membership. Prime membership funds content. Content keeps people in the Amazon ecosystem. The data from all of that improves advertising. AWS profits fund everything else.
That flywheel, set in motion by Jeff Bezos with a $300,000 loan from his parents in 1994, is now one of the most powerful business engines ever built.
Have a question about a specific Amazon service or want to know more about any part of the business? Drop it in the comments.