As one of the world’s leading retailers, Amazon is widely known in the U.S. and internationally as well. Chances are you’ve shopped on Amazon or at the very least know someone who has.
Considering Amazon’s huge presence in today’s day and age, you may be wondering, is Amazon a nonprofit organization? I had the same thought, and what I found in my research surprised me!
Key Takeaways
Is Amazon A Nonprofit Organization In 2022?
Amazon is a for-profit organization, as the company posted $386 billion U.S. dollars in revenue in 2020, up by more than $100 billion the year before. Although Amazon is not a nonprofit, its mission to be the “earth’s most customer-centric company” highlights its dedication to giving back and ensuring a bright future for communities around the world.
If you want to know more about Amazon’s for-profit status and its connection to charities, particularly how the company gives back, then keep reading!
Is Amazon For-Profit?
Amazon is a for-profit company and one of the biggest retail earners in the world. Amazon ranks second on the Fortune 500 list with a 38% revenue growth rate and a $21.3 billion profit in 2020.
These eye-watering numbers are forecast to continue climbing, with Forbes estimating Amazon’s revenue to reach $488 billion in 2021.
While Amazon keeps posting record profit margins, the company does spend billions of dollars on marketing and operations.
In fact, Amazon is well-known for its investments for the future, such as Upskilling 2025, a $1.2 billion investment to offer free employee skills training, and over $1 billion invested in electric delivery vans to hit the road too.
Essentially, this means that although Amazon is a for-profit company, its profits are not just for the owners, but also help cover vast expenses and investments to stay at the forefront of innovation.
Does Amazon Pay Taxes?
Amazon does pay taxes as a for-profit corporation, although it gets a big tax break thanks to its massive investments and commitment to sustainability and job creation.
This is different from nonprofit organizations that are exempt from paying federal income taxes.
Like other big corporations, Amazon pays taxes but makes the most of deductions and credits to keep tax payments to a minimum.
In fact, Amazon has a reputation for using corporate loopholes to avoid federal taxes.
Additionally, in 2020, Amazon’s federal income tax rate was 9.4 percent, which is much less than the standard statutory corporate tax of 21 percent.
Before that, Amazon actually received federal tax refunds in 2017 and 2018 totaling over $250 million. Research and investment deductions help Amazon reduce taxes and manage its profits accordingly.
Does Amazon Have Nonprofit Accounts?
Amazon has nonprofit partners it teams up with to give back. AmazonSmile is a separate Amazon.com portal with the same prices and products.
The only difference is that Amazon donates 0.5% of eligible purchases to your selected charitable organization, with no hidden fees or extra costs. This is a good way to make a difference and give back, especially for regular Amazon shoppers.
AmazonSmile has donated $286 billion to U.S. charities with over one million local and national nonprofits receiving valuable donations.
This includes everything from poverty relief to financial literacy, animal rights to legal assistance, and many more important charitable causes.
Customers who want to shop on AmazonSmile just need to visit smile.amazon.com instead of the normal site and select the charity they want to help.
There’s also the option to donate items to charity as many AmazonSmile charity wish lists are available, highlighting items local nonprofits need right now.
What Does Amazon Customer-Centric Mean?
Amazon itself may not be a nonprofit with a collective social benefit, but it is on a mission to change the world anyway by improving customer experiences.
According to Amazon’s about us page, “Amazon strives to be earth’s most customer-centric company.” This statement is part of Amazon’s motivation to be the best employer and safest place to work.
By putting customers first and focusing less on competitors and more on what shoppers want and need, Amazon has grown substantially over the past few years.
With a one-million-person workforce and growing, Amazon is determined to take care of customers and ensure they always have a safe, easy place to shop online.
In other words, Amazon uses its customer-centric standards to appear more approachable and distinguish it from other for-profit companies that are motivated by money and greed.
The Climate Pledge and Just Walk Out technology by Amazon are two examples of Amazon’s customer-centric operations based on feedback and future trends.
Many loyal customers say it’s clear Amazon doesn’t only care about profits, thanks to the extensive customer service and investment in community connections and job creation.
If you want to learn more, you can also read our posts on why do Amazon prices change, if Amazon is a wholesaler or retailer, and what CRM does Amazon use.
Conclusion
Amazon is a hugely popular place to shop online for millions of products, and due to its skyrocketing sales, Amazon is definitely a for-profit company, not a nonprofit organization.
Amazon does not meet the criteria for a nonprofit so it’s not exempt from federal income taxes, although the company does get plenty of tax breaks and credits due to its huge workforce and constant investments.
Also, Amazon tries to distance itself from the traditional for-profit model by using the “customer-centric” tagline.
Amazon promises to provide excellent customer service and employment opportunities while improving the online shopping experience, which isn’t the same as a charitable cause but can still have a positive impact on the community nonetheless.