Last week, Amazon released its Q4 and full year 2023 earnings report. Below you will find some of the highlights.
We’ll start here: The year-over-year growth in Amazon’s on-line store sales was up 9% in Q4 versus 2022. That continues solid growth in the metric in the last couple of quarters at Amazon after a year of flat or even slight declines in that measure.
That had caused a number of observers to wonder if ecommerce had reached a plateau.
Overall, and working off a very large number, net sales increased 14% to $170.0 billion in Q4, compared with $149.2 billion in Q4 2022. For the full year, net sales of $574 million were up about 11% from $514 billion the previous year.
As a note, Amazon’s on-line stores sales of $232 billion in 2023 were just 40% of the total.
It was also a pretty profitable quarter, with Amazon’s net income increasing to $10.6 billion compared with just $0.3 billion the prior year. For the full year, profits were a big $30.4 billion, versus a slight loss for 2022.
Operating income was also way up, reaching $13.6 billion in Q4 versus $2.7 billion in 2022, while for the full year operating income of $36.8 billion was about three times the $12.2 billion the previous year.
Fulfillment costs increased 13% in Q4. Those include the cost of workers need to run its fulfillment centers, sortation centers and other logistics facilities. Also under fulfillment costs are any lease payments for these building, or depreciation costs if Amazon owns the facility. Some inbound logistics costs are also included.
It’s worth noting that the 13% gain in fulfillment costs in the quarter were 4 percentage points above the 9% growth in on-line store sales, reaching $26.0 billion dollars, and with fulfillment costs not included in shipping costs.
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 Those were a whopping $24.7 billion in the quarter, up almost 25% versus previous year, again well above the 9% increase in ecommerce revenue.
Fulfillment costs were 11.2% of on-line store sales, while shipping costs represented 10.6%. Together, fulfillment and shipping were 21.8% of ecommerce revenue.
Also worth noting is the fact that services revenue, such as its Marketplace, Fulfillment by Amazon, and AWS businesses, increasingly exceed product sales.
In Q4, services were 54.7% of total Amazon sales, versus 54.5% for all of 2022.
All told a solid quarter for Amazon.
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