Web services and advertising drive growth.

 

Amazon has reported a strong financial result for 2021 with sales up 22 per cent to $US470 billion, doubling profit to $US33.4 million. 

 

Sales for the last three months of 2021 increased by 10 per cent year-on-year to $US137.4 billion.

 

The gains were driven by growth in areas such as its cloud computing division, Amazon Web Services, and advertising, while its e-commerce sales dipped from 2020, when the pandemic propelled blockbuster gains.

 

Third party sellers are big users of Amazon’s advertising platform, which generated $US31.2 billion in revenue last year.

 

Fees from third party marketplace sellers – which represent more than 50 per cent of all products sold on Amazon – exceeded $US100 billion in 2021. 

 

Amazon said that despite on-going supply issues and staff shortages, it forecast sales growth of three-to-eight per cent in the first three months of 2022.

 

"As expected over the holidays, we saw higher costs driven by labour supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," Amazon chief executive Andy Jassy said.

 

Amazon now employs more than 1.6 million people worldwide.

 

Prime price hike 

Meantime, Amazon has hiked the price of its annual Prime service in the US, which is tied to cheaper shipping and other discounts, by 20 per cent..

 

In Australia, an Amazon Prime subscription is currently $6.99 a month or $59 a year.

 

Amazon claims that the steep price rise price is meant to address higher costs Amazon is facing across the board, from shipping to labour to construction.