Amazon Australia narrows loss in 2018

Heather McIlvaine

2nd Apr 2019

Amazon Australia narrowed its total loss for the year ended December 31, 2018 by roughly 40 per cent to $5.34 million, compared to the previous corresponding period.

Accounts lodged with the Australian Securities & Investments Commission over the weekend, show that the e-commerce company generated $292.33 million in revenue in the 2018 calendar year, compared to $17.38 million in the 2017 calendar year.

It should be noted that Amazon’s retail offer was operational for less than a month in 2017; it only started selling to consumers on December 5 of that year.

The revenue increase in 2018 was driven by significant operational expansion, including the launch of Fulfilment by Amazon in February 2018 and Amazon Prime in June 2018, and entry into new categories, such as pantry essentials, pet care products and textbooks.

Revenue from third-party seller services, which includes the cut that Amazon takes from every sale that occurs on its marketplace, was $23.34 million in 2018, representing nearly 8 per cent of the company’s total revenue.

Most of Amazon Australia’s revenue came from its own retail sales, which totalled $106.26 million in the period, while subscription services – Prime – contributed $4.32 million in revenue. Amazon attributed $498,437 in revenue to “other” sources. This mostly has to do with ad services.

The company’s biggest expense was marketing. Amazon Australia spent $68.06 million on this in the year ended December 31, 2018. The next biggest expense was related to employee pay. The company spent $23.36 million on salaries and wages, plus another $10.75 million on other employee benefits and costs, $7.37 million on stock-based compensation and $4.30 million on bonuses and commissions.

After accounting for other expenses, the retailer posted a $4.38 million loss for the year. After tax, this amounted to $5.34 million.