Without a doubt, the pandemic has hardly hit many American businesses, but Amazon has been fortunate. The earnings of Amazon have more than tripled while many small businesses are struggling to survive.
In its first quarter of 2021 earnings report released last Thursday, Amazon has clearly shown that it is thriving well. The earnings of Amazon have been growing in spite of the pandemic, its coffers have been overflowing.
The earnings of Amazon tripled during pandemic
During the first quarter of this year, Amazon reported $8.1 billion of net income, says Rachel Kraus of Mashable. Bringing its total pandemic earnings to about %26.9 billion. This means that Amazon made money three times more compared to the three years combined earnings. Also, it more than tripled from the same periods of previous year’s net income of $2.5 billion.
Executives from Amazon disclosed that they have seen significant growth of sales during the pandemic. They noticed that increasing customers shopped more frequently and in a wider range of categories during the pandemic .
50 million additional Prime members have helped its bottom line
Amazon reportedly added 50 million of Prime members during the last year, bringing the total to 200 million Prime members. Prime members are paying $120 annually for its membership. So, its membership fee alone has contributed about $24 billion to the earnings of Amazon.
On the other hand, many businesses are giving an entirely different story. Facebook and the Small Business Roundtable have reported that about 22% of US small businesses shut down in February 2021. Not much significant difference than the pandemic high of 23% last May 2020.
In a recent report from the US Small Business Administration, self-employment has gone down significantly. The number of self-employed have lowered by 20% in April 2020 compared to the same period of the previous year. And the rebound from the April’s low has been a bit slow.
Asians, Blacks, and the Hispanic people are the most affected
The report has shown that the Asian, Blacks, and the Hispanic people are the most hardly hit. The most affected are the Asians, followed by the Blacks, then the Hispanic people.
And there has been a slow rebuilding effort seen from the government. With the self-employed people still working is still lower by 3.6% compared to the pre-pandemic time. Meaning more are still not able to have a decent work to earn for a living.
Amazon seems to contradict its business model
Amazon has been saying several times that its business model empowers small businesses. By providing them access to reach more customers through its platform. And yet, Amazon still takes a cut of those sales from them. The worst thing is that, when it spots some promising products, it copies the products from the independent sellers. This eventually will hinder the small independent sellers to grow more.
As the world is slowly getting back on its feet, the profits of Amazon may continue to grow exponentially. This also will not escape the attention and scrutiny of the regulators.