How about third-party sellers? We have an internal team (the Selling Partner Services team) that works to answer that question.
#Hopefully it will be worth the weight plus#
In 2020, employees earned $80 billion, plus another $11 billion to include benefits and various payroll taxes, for a total of $91 billion.
What is an expense for a company is income for employees. How about employees? This is also a reasonably easy value creation question to answer because we can look at compensation expense. If, instead of being a publicly traded company with thousands of owners, Amazon were a sole proprietorship with a single owner, that’s how much the owner would have earned in 2020. Our net income in 2020 was $21.3 billion. How much value did we create for shareowners in 2020? This is a relatively easy question to answer because accounting systems are set up to answer it. I’m going to switch gears for a moment and talk about the past. They are a prediction of future cash flows discounted back to the present. Remember that stock prices are not about the past. Any business that doesn’t create value for those it touches, even if it appears successful on the surface, isn’t long for this world. Your goal should be to create value for everyone you interact with. If you want to be successful in business (in life, actually), you have to create more than you consume. But I also know something else: it’s not the largest part of the value we’ve created. It’s significant, and it improves their lives. I’m proud of the wealth we’ve created for shareowners. I know people who’ve used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity – and the list goes on. I am approached with similar stories all the time. Who are they? They’re pension funds, universities, and 401(k)s, and they’re Mary and Larry, who sent me this note out of the blue just as I was sitting down to write this shareholder letter:
But more than 7/8ths of the shares, representing $1.4 trillion of wealth creation, are owned by others. Who are they? Your Chair is one, and my Amazon shares have made me wealthy. We took great risk with each one and put sweat and ingenuity into each one.Īlong the way, we’ve created $1.6 trillion of wealth for shareowners. They weren’t even ideas then, and none was preordained. In 1997, we hadn’t invented Prime, Marketplace, Alexa, or AWS. Amazon Web Services serves millions of customers and ended 2020 with a $50 billion annualized run rate. Customers have connected more than 100 million smart home devices to Alexa. More than 1.9 million small and medium-sized businesses sell in our store, and they make up close to 60% of our retail sales. We have more than 200 million Prime members worldwide.
Last year, we hired 500,000 employees and now directly employ 1.3 million people around the world. We’ve come a long way since then, and we are working harder than ever to serve and delight customers. We had just gone public at a split-adjusted stock price of $1.50 per share. I noted that Amazon had grown from having 158 employees to 614, and that we had surpassed 1.5 million customer accounts. In Amazon’s 1997 letter to shareholders, our first, I talked about our hope to create an “enduring franchise,” one that would reinvent what it means to serve customers by unlocking the internet’s power.
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