updated 01:01 am EDT, Wed May 7, 2014
Amazon still king, but business model lags behind rivals in profitability
While Amazon is still the undisputed king of the hill in terms of selling things online, a pair of factors have worked together to allow Apple to jump 24 percent in online sales over the last year, knocking out Staples from its traditional second-place spot. Apple's online sales are only about a quarter of the total gross revenue Amazon pulls in -- but with 800 million credit cards on file and continuing direct competition between the two, Apple's rise (and far higher profitability) make be making the king a little nervous.
For 2013, as compiled by trade publication Internet Retailer, Amazon sold about $67.8 billion in products, more than its next 10 biggest competitors combined, according to the Wall Street Journal. Compared to Apple's $18.3 billion in the same period, it marks Amazon as the clear leader -- until you look at profitability. For all its revenue, Amazon essentially operates as a non-profit, making nearly zero in profits for all that volume. Apple, on the other hand, made over $35 billion in profits in 2013.
Apple's jump in revenues, clocked at 24 percent in 2013, is misleading: Internet Retailer had never counted Apple's online hardware sales, nor its vast iTunes and App Stores' income in previous reports. On top of that, the company continued to grow revenues, all of which combined led to the dramatic-looking leap in online sales.
In addition to its trouble with profits, Amazon also saw its growth rate fall compared to some rivals. Amazon sales grew 20 percent in 2013, but fourth-place online retailer WalMart's sales grew to $10 billion in 2013 -- a rise of 30 percent, and the first time Walmart has ever bested Amazon on growth. Staples, usually in second place, fell to third with online sales rising only one percent, to $10.4 billion. Online sales now account for 45 percent of Staples' total income. Staples' rivals in the online office-supply business -- Office Depot and Office Max -- likewise reported very slight growth in online sales.