Ask HN: How does Amazon work?

2 points·plicense··1 comment

I've read a number of articles on the internet about how amazon works, but most of them use tricky financial terms to describe how Amazon works. In simple terms, how can a company like Amazon, which has reported a quarterly loss of $574M still function? Where does it get its money from? Who invests in the company?

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This is an enormously complicated question, and a good answer requires knowing a bit about your background and what you already understand about business.

As for some high level answers to your three questions:

1) They lost a lot of money, how can they function? Well, it depends on your definition of "a lot". Look at http://finance.yahoo.com/q/bs?s=amzn+Balance+Sheet&annual and you will see on the top line, at the end of 2013, Amazon had about $8.6 billion in cash. $574m is only about 6% of that.

2) Where does it get money? There are two main sources. The first is selling goods (books, etc) and services (Amazon Web Services, etc). The second is investors. Amazon owns a lot of it's own stock and if it wanted, it could sell that stock to get more cash.

3) Who invests? Lots of individuals and groups. You're not going to be able to get a list of literally every person who owns a share, but you can easily find out which groups/people own large chunks: https://finance.yahoo.com/q/mh?s=AMZN+Major+Holders

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