Amazon generated over $715 billion in total revenue in 2025, but the way it earns that money is far more complex than simply selling products online. The company runs several distinct businesses, and the one that generates the most profit isn’t the online store most people associate with the brand. Here’s how each piece works and where the real money flows.
Online Retail: The Biggest Revenue Line
Amazon’s own retail operation, where it buys inventory and sells directly to customers, brought in $269.3 billion in 2025. That makes it the single largest revenue stream by dollar amount. When you buy a product listed as “Ships from and sold by Amazon.com,” that sale falls into this category.
But big revenue doesn’t mean big profit. Retail is a low-margin business. Amazon has to purchase inventory, store it in warehouses, ship it to your door (often for free with Prime), and handle returns. After all those costs, the profit left over on each sale is thin. The online store functions more as a traffic engine than a profit center. It draws hundreds of millions of shoppers to the platform, and those shoppers generate money for Amazon’s higher-margin businesses.
Third-Party Seller Fees
More than half the products sold on Amazon come from independent sellers rather than Amazon itself. These sellers pay Amazon for the privilege of listing on its marketplace, and those fees totaled $172.2 billion in 2025.
The fee structure has two main components. First, sellers pay a referral fee on every sale, typically ranging from 8% to 15% of the item’s selling price depending on the product category. Second, most sellers use Fulfillment by Amazon (FBA), where Amazon stores, packs, and ships their products. FBA fees vary by item size and weight. For standard-size products priced between $10 and $50, fulfillment fees run a few dollars per unit. Items priced under $10 get a discount, while larger or heavier products cost more to fulfill. Amazon also charges aged inventory fees for products sitting in its warehouses too long: items stored for 12 to 15 months incur fees of $0.30 per unit per month, and that rises for anything older.
This model is enormously profitable for Amazon. It earns revenue from every sale without taking on the risk of buying inventory. The sellers handle product sourcing and pricing; Amazon collects a cut of each transaction plus warehousing and shipping fees.
AWS: The Profit Engine
Amazon Web Services, the company’s cloud computing division, is the single most profitable part of Amazon. AWS generated $128.7 billion in revenue in 2025 and posted $45.6 billion in operating income. To put that in perspective, AWS accounted for roughly 18% of Amazon’s total revenue but generated more operating profit than the entire North America retail operation.
AWS rents computing power, data storage, and software tools to other businesses. Its customers range from startups running a single app to massive enterprises and government agencies migrating entire IT systems to the cloud. Companies pay based on how much computing capacity they use, which creates a recurring, scalable revenue stream. Unlike retail, where margins are razor-thin, cloud services carry operating margins above 35%. Every dollar AWS earns contributes far more to Amazon’s bottom line than a dollar from selling household goods.
This division is what transformed Amazon from a high-revenue, low-profit retailer into one of the most profitable companies in the world. Amazon’s North America retail segment (which includes the online store, third-party fees, and subscriptions for domestic customers) earned $29.6 billion in operating income on $426.3 billion in sales. AWS earned more profit on less than a third of the revenue.
Advertising
Amazon’s advertising business has grown into a $68.6 billion revenue stream, making it one of the largest digital ad platforms alongside Google and Meta. The core product is sponsored listings: when you search for “running shoes” on Amazon, the first several results are often paid placements from brands competing for your attention at the exact moment you’re ready to buy.
That proximity to a purchase decision is what makes Amazon’s ad platform so valuable to brands. Someone searching on Amazon typically already intends to buy something. Advertisers pay per click, and the competition for top placement in popular categories drives prices up. Beyond sponsored product listings, Amazon has expanded into video advertising through Prime Video, which contributed meaningfully to ad revenue in late 2025. The advertising business carries high margins because Amazon is essentially selling visibility on a platform it already operates.
Prime and Other Subscriptions
Amazon’s subscription services generated $49.6 billion in 2025, growing 14% year over year in the fourth quarter alone. The bulk of this comes from Prime memberships, which include free shipping, streaming video, music, and other perks. But the subscription category also includes standalone services like Kindle Unlimited, Audible audiobook memberships, and Amazon Music.
Prime membership does more than generate subscription fees. It changes how members shop. Prime members tend to buy more frequently and spend more per year on Amazon than non-members, because free two-day shipping removes the friction from small purchases. That increased shopping activity feeds revenue into the online store, third-party seller fees, and advertising businesses simultaneously. Prime functions as a loyalty program that makes every other part of Amazon’s business more valuable.
Where the Profit Actually Comes From
Amazon’s total operating income for 2025 was roughly $80 billion. AWS contributed $45.6 billion of that, or about 57%. North America operations (covering all U.S. retail, marketplace, and subscription activity combined) added $29.6 billion. International operations, which include the same mix of retail and marketplace business outside the U.S., contributed $4.75 billion.
The international segment has historically been a money loser for Amazon, as the company invested heavily in building out logistics networks and market share in countries like India, Brazil, and across Europe. Its move into profitability reflects those investments starting to pay off, though margins remain much thinner than in North America.
The overall picture is a company that uses retail as a massive customer acquisition tool while generating the bulk of its profit from cloud computing, advertising, and marketplace fees. The online store brings people in. Everything else turns that traffic into high-margin revenue.