Amazon's machine does not stop on its way to a trillion dollars in revenue (except in Israel)

At the beginning of August, Amazon entered an extremely exclusive club when its market value crossed the 3 trillion dollar mark for the first time. The rise was recorded after strong reports and, above all, against the backdrop of an acceleration in cloud activity, which returned Wall Street's enthusiasm for the company's main growth engine. However, behind this huge number hides another, no less exciting goal: if Amazon maintains the growth rate of recent years, it will approach a situation where its sales turnover will cross a trillion dollars a year.

In 2025, Amazon's revenues totaled 716.9 billion dollars, compared to about 638 billion dollars the year before - which shows an annual growth rate of 12%. A simple calculation demonstrates that if this rate is maintained, revenues will reach about 803 billion dollars in 2026, about 900 billion dollars in 2027, and will cross the trillion threshold during 2028. This is, of course, not an official forecast by Amazon, but an illustration of the pace at which Jeff Bezos' machine is growing.

To understand how a company that started its way three decades ago as an online bookstore can approach such a turnover, one must first stop thinking of it as a store. Over the years, Amazon has built a network of diverse revenue sources from different fields of activity. Some of those arms even generate profit for it not only when it sells a product, but also when someone else sells it, stores it, ships it, advertises it, or uses it.

Variety of revenue-generating activities

The numbers in Amazon's annual report illustrate how much the company has changed since Jeff Bezos founded it in the 90s. In 2025, its online stores brought in 269.3 billion dollars; services for third-party sellers - including sales commissions, storage, shipping, and other services - brought in another 172.2 billion dollars; AWS, the cloud activity, brought in 128.7 billion dollars, the advertising business 68.6 billion, and subscription services, including Prime, another 49.6 billion dollars. To this are added 22.6 billion dollars from physical stores and about 5.9 billion dollars from other activities.

The marketplace for third-party sellers is a good example of how Amazon's revenue engines feed each other. Hundreds of millions of consumers come to the site because of the selection, price, and convenience. Sellers want to be where the consumers are, and therefore pay a commission. Some of them also transfer inventory to Amazon's warehouses and pay it for storage, picking, and shipping. And then, after they have joined a site where countless products compete for the same customer, they are sometimes required to spend more money so that their product stands out at all in the growing flood of products.

From here grew one of Amazon's most impressive businesses in recent years - advertising. In 2023, its advertising revenues totaled 46.9 billion dollars; a year later they reached 56.2 billion, and in 2025 already 68.6 billion dollars. Within two years, this is a growth of about 46%. In the second quarter of 2026, the trend even strengthened, and advertising revenues jumped by 26% compared to the corresponding period and reached 19.8 billion dollars within three months.

Threat from Walmart and TikTok

If there is a company that illustrates how much this model has become a standard that American retail aspires to, it is Walmart. For years it was the antithesis of Amazon, with thousands of huge stores, enormous purchasing power, and a distribution system built around a physical world. Today it uses exactly these assets to compete online. Walmart's e-commerce sales in the US jumped in the first quarter of 2026 by 26% to 178 billion dollars, and year after year it tries to bite back the market share that Amazon took from it over the years.

But the newer threat to Amazon's hegemony comes from a completely different place - the TikTok Shop. The volume of goods sold through videos on the Chinese social network around the world reached about 64.3 billion dollars in 2025, and in the US alone, the value of goods sold on the platform reached about 15 billion dollars.

The pace continues. According to the Wall Street Journal, in the first quarter of 2026, products worth about 4.9 billion dollars were already sold through the TikTok Shop in the US. Consumer spending there grew by 46% compared to the previous year, and the platform reached about 3% of the US e-commerce market.

Its innovation is that advertising, product discovery, and checkout become almost the same action. The consumer does not necessarily open the app because they need a face cream, a bag, or a gadget. They see a video, an influencer, or a live broadcast - and discover that they want them.

"We are seeing another interesting phenomenon in this context," explains Nir Zigdon, an e-commerce expert and CEO of eCommunity. "The American customer sees goods on TikTok, thinks they don't want to buy from a Chinese person, and then goes and buys from Amazon because it seems more reliable to them. Although it is very strange, because many times these are the same sellers on the marketplace."

Amazon's reports at least reinforce the argument, as the company notes that sellers from China are responsible for a significant part of its revenues. "People prefer to buy from Amazon because there is a feeling that there is a 'mom and dad'," adds Zigdon. "In the US there is Same Day Delivery. Sometimes the customer prefers convenience over price, even if in the end it is the same product."

Not enthusiastic in Israel

The Israeli story of Amazon has always been more interesting. Shop Analytics data shows that in June 2026, the three Chinese platforms (AliExpress, Temu, Shein) alone concentrated about 75% of Israelis' orders online. Amazon is responsible for only 6%.

"It's interesting, because in other countries Amazon is a very significant player, and here it hasn't managed to create the same hold," says Zigdon. And it's not because it didn't try. In April 2019, Amazon approached Israeli sellers and invited them to join the Local Delivery program. The idea was to allow suppliers to present products to Israelis through Amazon, and supply them from inventory already in the country within five business days. But there was a critical difference from the model that Americans know: Amazon did not set up a Fulfillment center of its own here, and sellers were required to handle inventory and supply themselves.

This is exactly the trap that Zigdon points to. A marketplace works well when it gives a supplier something that is hard for them to get alone - a huge audience, exceptional logistics, or trust that justifies a higher price. But in a small market, when the same importer can sell on their own site, and the consumer can compare prices in seconds, any additional commission can become a disadvantage. "The Israeli consumer is in a very small and crowded market," says Zigdon. "If the same importer sells a product for 1,000 shekels, and then on the marketplace they have to add to the price because of the commissions, a problem arises. Maybe the customer was exposed to the product on the marketplace, but in the end goes to buy directly from the seller."

Opposite Amazon's partial attempt in Israel, the investment of AliExpress in local presence has stood out in recent years. The company Parcel Home, which is a logistics arm that delivers packages from AliExpress, launched operations in Israel in 2024 and already in April of this year operated about 45 distribution points.

At the same time, AliExpress operates local warehouses that allow shortening shipping times in some cases to 7-10 days, and added an option to choose in advance a preferred collection point near the house. "The thing that most delays e-commerce is presence on the ground and advertising," says Zigdon. "This is perhaps one of the reasons why it doesn't work for Amazon in Israel like in other markets."

Local attempt failed

In December 2023, the marketplace activities of Azrieli, Melisron, and Shufersal were closed within a week. Azrieli invested over the years in Azrieli.com and recorded losses of about 300 million shekels. The investment volume of Melisron in the GROO activity reached about 100 million shekels. Industry sources explained to Globes then that to maintain a trading arena, large investments are required in traffic, advertising, customer service, technology, and logistics - when in the local market it is difficult to reach a turnover that justifies the entire system.

A marketplace is not just a site with many products. It is a business of economies of scale. More buyers bring more sellers, more sellers bring more selection, selection brings more buyers - and then you can charge sellers commissions, logistics services, and advertising. In the US, Amazon is already deep inside this cycle. In Israel, whoever starts from zero has to finance it.

KSP chain provides an interesting example. In June, it was the leading Israeli site in the Shop Analytics index, with 18% of orders on the twenty leading local sites. According to Zigdon, "KSP is very successful even though it is a retailer that buys and sells. It has become a multi-brand, and that is something that Israelis like. It also does a lot of parallel importing to really break prices. Maybe in the Israeli market there is no room for a general marketplace in the classic model."

This is a conclusion that also connects to Shop Analytics data: in May, the three leading Israeli sites were KSP, Super-Pharm, and Shufersal - three players that started from specific retail activity, and only later expanded the offering to more distant categories.

AI enters the equation

And now another change is coming. If once the easy way for a small business to reach a buyer in the US was to enter Amazon, then AI makes cheaper and simplifies some of the tools required for setting up an independent store, creating content, and digital advertising. From Zigdon's point of view, this may actually strengthen the feasibility for Israeli businesses to look outward instead of fighting for the local market.

"Today in the world of AI, e-commerce sites are set up cheaply," he says. "What I see with many Israelis is that if you are a manufacturer and not an importer, there is almost no reason not to try to sell abroad. The marketplaces abroad are of different orders of magnitude. Amazon US or England - there is nothing to compare them to the Israeli market."

But even here Amazon has an exceptional advantage. Technology may allow almost anyone to set up a store, but it still does not give them hundreds of millions of customers, a network of warehouses, a distribution system, buyer trust, and an advertising engine that is activated exactly at the moment they want to purchase. This is what makes Amazon a machine that is so hard to compete with.

Therefore, if Amazon does indeed cross the trillion-dollar threshold in annual revenue in the coming years, it will probably not be because the world started ordering twice as many packages from it. It will happen because for three decades it has managed to place cash registers at more and more points on the way between those who want to sell - and those who want to buy.