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Amazon’s net income per employee is 33,000 USD [0]. This means every Amazon employee could get a 30,000 USD raise and Amazon would still be profitable. [0] htt

by smadge 8y ago

Amazon’s net income per employee is 33,000 USD [0]. This means every Amazon employee could get a 30,000 USD raise and Amazon would still be profitable. [0] https://csimarket.com/stocks/singleEfficiencyeit.php?code=AMZN https://csimarket.com/stocks/singleEfficiencyeit.php?code=AM...

ralusek 8y ago
Net income, like the cost of their rent, inventory, infrastructure, R&D, advertising, acquisitions are all taken into account before coming to this figure? Or is it just employee costs like salary and benefits? I find that hard to believe, but if it's the case, then they clearly don't have razor thin margins, and what I said before simply doesn't apply to Amazon.
- smadge 8y ago
  The number is the net revenue (income minus all operating expenses, including salaries/wages, facilities, goods, taxes, etc) divided by the number of employees.
- adventured 8y ago
  For 2017 their net income per employee was around $6,000. The parent claim is off by a factor of five. $3b in net income for fiscal 2017, and an average of perhaps 450k-500k employees for the whole year. For 2018 they might produce $6b in net income, assuming they don't go on a big spending spree (which they're prone to do). They'll average perhaps 600,000 to 650,000 employees for 2018. So their net income per employee ratio is going to be closer to $10,000. It'll still be nowhere near the $33,000 the parent claims. $33,000 in net income per employee would require near $20b in net income this year. Amazon does in fact have extraordinarily razor thin margins, in their retail business. AWS is very profitable, with ~25% style operating income margins. It's providing all of the net income Amazon is generating now, retail essentially reinvests its thin margins right back into growth and improving fulfillment. Walmart has 2.5% to 3% net income margins for example. Facebook is typically up at 40% to 50% for comical contrast. Amazon's retail business will spend most of its existence with 2% to 5% type margins. Costco had a 2% net income margin for 2017. Target was at 3.9%. High volume, low margin retail is a horrendous business, very few operators can survive with such perpetually low margins. You have to execute at an extraordinary level.

by smadge 8y ago

ralusek 8y ago

Net income, like the cost of their rent, inventory, infrastructure, R&D, advertising, acquisitions are all taken into account before coming to this figure? Or is it just employee costs like salary and benefits? I find that hard to believe, but if it's the case, then they clearly don't have razor thin margins, and what I said before simply doesn't apply to Amazon.

smadge 8y ago
The number is the net revenue (income minus all operating expenses, including salaries/wages, facilities, goods, taxes, etc) divided by the number of employees.
adventured 8y ago
For 2017 their net income per employee was around $6,000. The parent claim is off by a factor of five. $3b in net income for fiscal 2017, and an average of perhaps 450k-500k employees for the whole year. For 2018 they might produce $6b in net income, assuming they don't go on a big spending spree (which they're prone to do). They'll average perhaps 600,000 to 650,000 employees for 2018. So their net income per employee ratio is going to be closer to $10,000. It'll still be nowhere near the $33,000 the parent claims. $33,000 in net income per employee would require near $20b in net income this year. Amazon does in fact have extraordinarily razor thin margins, in their retail business. AWS is very profitable, with ~25% style operating income margins. It's providing all of the net income Amazon is generating now, retail essentially reinvests its thin margins right back into growth and improving fulfillment. Walmart has 2.5% to 3% net income margins for example. Facebook is typically up at 40% to 50% for comical contrast. Amazon's retail business will spend most of its existence with 2% to 5% type margins. Costco had a 2% net income margin for 2017. Target was at 3.9%. High volume, low margin retail is a horrendous business, very few operators can survive with such perpetually low margins. You have to execute at an extraordinary level.