Amazon should divest its retail business and focus on likes of AI, banking, aerospace and defence
Would Amazon be stronger without retail? If it surgically expands into the right industries, yes. That’s the view of Brittain Ladd, a supply chain consultant and former Amazon executive.
In a LinkedIn post, Ladd notes that the company’s retail operations now account for less than 40% of its total business. Amazon Web Services (AWS), advertising, Prime, and logistics are where the real margins live. Retail, on the other hand, remains a low margin, capital intensive, and highly regulated business.
Amazon has been a retailer since the firm was founded on 5th July 1994. However, in Q3 2025, it generated $73 billion from online and physical store sales, and $107 billion from AWS, subscriptions, third party seller fees, and advertising - 60% of Amazon is providing services rather than selling products.
“What does this mean? In my opinion, I believe it should divest its retail business. I estimate its retail, marketplace (3P) fees, advertising tied to retail search, and retail data assets support a valuation of $200 billion to $300 billion,” he commented.
“Amazon could retain 20% to 30% of its retail business and spin it off. But why divest or spin off retail?Imagine an Amazon that no longer fights in the trenches of e-commerce but instead focuses on aerospace and defence, space and satellites, AI, banking and finance, and pharmaceuticals - industries with 10–30x the margin potential of retail.”
Amazon could retain its logistics and fulfillment operations, Ladd believes, transforming them into a profit engine serving not only its former retail division but the majority of the Fortune 500. “Think of it as AWS for logistics - fulfilling commerce for the majority of retailers but also managing logistics for large automotive parts suppliers, John Deere, and other companies with parts dealerships.”
“Amazon would likely retain the fulfillment and logistics for whoever acquires their retail business. Who should acquire Amazon's retail business? I anticipate a bidding war between Costco Wholesale and Walmart. The wild card - Meta.”
He added: “From a game theory perspective, this is a masterstroke. While Walmart and Target remain locked in a low margin battle for consumer share, Amazon would reposition itself as a global infrastructure and intelligence powerhouse - the world’s first AI infrastructure conglomerate.”
Ladd concluded: “I've written many times that this isn’t science fiction. The next trillion dollars of value creation won’t come from selling goods - it will come from controlling the infrastructure that moves goods, data, capital, and intelligence. Sort of like what would happen if Palantir Technologies acquired DHL or FedEx. Jeff Bezos famously stated that customers will always want low prices, fast delivery and vast selection. Amazon has achieved the goal. Now what?”
2025 RTIH INNOVATION AWARDS
Online retail was a key focus area at the 2025 RTIH Innovation Awards.
We received a record number of entries and many fantastic examples of the continued resilience and dynamism of the retail space during hugely challenging times.
For a full rundown of all of the shortlisted entries, click here.
Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC in Central London on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.
In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”
“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”
He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”
Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.
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