Having ignored critics for years, Bezos’ willingness to sacrifice short-term profits for long-term success appears to be bearing fruit.
Not only has Amazon cemented its position as the leading online retailer in large parts of the world, it has also built an industry-leading cloud computing business, established itself as a major player in music and video streaming and built an impressive lead in the booming smart speaker market.
The company has achieved all that by constantly re-investing most of the money it earns. In the past twelve months, Amazon’s net income amounted to $3.03 billion. While that is its biggest annual profit by far, it still looks miniscule compared to the company’s revenue of nearly $180 billion.
Our chart illustrates Amazon’s strategy by contrasting the company’s explosive long-term revenue growth to its relatively modest profit growth.