If there is one thing that Amazon’s founder and CEO Jeff Bezos is famous for, it’s his relentless commitment on long-term growth. Having ignored critics for years, Bezos’ willingness to sacrifice short-term profits for long-term success appears to be bearing fruit.
Not only has Amazon cemented its position as the no.1 online retailer in countless markets, it has also built an industry-leading cloud computing business and established itself as a serious contender in the growing media streaming landscape.
The company has achieved all that by constantly re-investing most of its profits. In the past twelve months, Amazon made a net profit of $596 million. In 2004, it made $588 million. The difference being: in 2015, Amazon generated $107 billion in revenue, which is more than 15 times the amount it had made in 2004. Our chart below illustrates Amazon’s strategy by contrasting the company’s revenue and profit growth since 1997.