In: Accounting
1. Summary on the segment data of Amazon Inc based on form 10K for fiscal year ended Dec'2018
Amazon has divided it's operations into three segments: North America, International, and AWS. Amazon allocates to segment results, the operating expenses “Fulfillment,” “Marketing,” “Technology and content,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology infrastructure costs are allocated to the AWS segment based on usage. The majority of the remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. There are no internal revenue transactions between our reportable segments.
North America
The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused online and physical stores. This segment includes export sales from these online stores. Amazon's North America segment dominates its net sales, accounting for $141.4 billion in 2018 and operating income of $7.3 billion. This is about 60.7% of the company's net sales for the year
International
The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores. Amazon has lost money in each of the last 3 years in its International sales. In 2018, it lost $2.1 billion on $65.9 billion in International sales. This is an improvement from the operating loss for FY 2017, when the company lost $3.0 billion on $54.3 billion in International sales. In 2018, Amazon's International segment accounted for 28.3% of the company's net sales.
AWS (Amazon Web Services)
The AWS segment consists of amounts earned from global sales of compute, storage, database, and other service offerings for start-ups, enterprises, government agencies, and academic institutions.
2. The most important findings discovered when reading the segment information: