Infographic: Visualizing Amazon’s Rising Shipping Costs

This revealing infographic delves into the rising shipping costs faced by Amazon, a standout performer during the COVID-19 pandemic. While the company experienced impressive sales growth and market valuation, it also confronted challenges in its shipping and fulfillment department, leading to escalating costs that now constitute a significant portion of revenues.

In 2021 alone, Amazon incurred $151.8 billion in shipping and fulfillment expenses, with shipping costs accounting for $76.7 billion and fulfillment costs amounting to $75.1 billion. These expenditures represent 32% of the company’s revenues, nearly double the figure of 18% in 2011. Despite these rising costs, Amazon’s overall profits remain robust, primarily due to the success of Amazon Web Services (AWS). This high-margin segment that contributes over 50% of the company’s operating profits while representing only 13% of sales. 

The financial prowess of AWS has prompted some investors to advocate for its spin-off as a separate entity, as specialized technology companies often command higher equity multiples. Amazon’s shipping and fulfillment expenses are staggering, totaling $288,000 per minute, compared to revenue of $956,000 per minute. To put this into perspective, the infographic highlights that this business expense surpasses the equity value of approximately 90% of companies in the S&P 500.

More data and visualizations are in our treasure trove of infographics on our site.

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