Week 35 - Amazon's AWS Engine Powers a Blowout Quarter: Shopify's New Merchant Deadlines, Etsy's Surprise Layoffs, and Walmart's Same-Day Push

MaxWelcome to The Checkout Point, your quick dive into this week's eCommerce buzz with me, Alex, powered by Blicket. These 20 minutes pack the latest trends, news, and insights. Let's navigate the digital marketplace together. Ready? Let's go.

RachelOkay. Okay, before we even start, I need someone to explain to me how a cloud computing company also sells me paper towels.

Speaker 3That's Amazon for you. It's the plot of a heist movie at this point.

RachelRight? Anyway, welcome back. I'm Max. That's Rachel. This is The Checkout Point, your weekly stop for what's actually happening in eCommerce.

Speaker 3And this week is a lot.

RachelIt is so much. So everybody already knows Amazon crossed that big $200 billion revenue mark. We covered that a couple weeks back.

Speaker 3Old news.

RachelOld news. But the number that actually made me sit up this week is the AWS run rate jump.

Speaker 3Okay, but run rate for who? Because a bigger cloud number doesn't automatically mean a better deal for the merchant paying for it.

RachelThat's the-- exactly the tension, right? Because operating income also just surged, and everyone's gonna read that as Amazon's crushing it.

Speaker 3Sure. Crushing it for Amazon.

RachelFair. Fair. But it's not just Amazon this week. Shopify's got a blowout quarter too.

Speaker 3Hmm, and I already have questions about what that means for the people actually selling stuff on it.

RachelSame. Honestly, every time one of these platforms posts a huge number, my first thought is, "Okay, but who's actually feeling that in their bank account?"

Speaker 3Right, because the headline and the merchant experience are not always the same story.

RachelExactly. And there's a whole other thread later about a company that just posted great earnings and then turned around and did something nobody saw coming.

Speaker 3Ooh, ominous.

RachelVery ominous. We'll get there.

Speaker 3Plus, retail's physical side is shifting too, which I have thoughts.

RachelYou always have thoughts.

Speaker 3That's the job.

RachelWell, buckle up because we've got Amazon, Shopify, Etsy, Walmart, Kroger, and even a stop up in Canada on the docket today.

Speaker 3It's a full plate. Let's not waste any more time on it.

RachelAlright. Let's start with the number that made my jaw drop this week. Okay, so digging into Amazon's own Q2 filing, net sales hit $200.6 billion, up 20% from last year.

Speaker 3Right, but we already flagged the 200 billion headline a couple weeks back.

RachelExactly. That milestone's old news at this point. The number I actually care about this time is buried inside AWS.

Speaker 3How buried?

RachelAmazon's release says AWS sales grew 37%, and it's now running at $169 billion a year annualized.

Speaker 3Wait, $169 billion? That's bigger than the entire economy of some countries.

RachelYeah, and operating income jumped 43% to 27.5 billion.

Speaker 3So the cloud side is basically funding everything else at this point.

RachelPretty much. Retail margins are razor thin, AWS margins are fat, and that gap just got a lot wider.

Speaker 3Makes sense why they keep pouring money into data centers like it's a race.

RachelIt kind of is.

Speaker 3I mean, 43% operating income growth on top of that run rate? That's not incremental. That's a different business shape.

RachelRight. AWS used to be the side hustle. Now it's carrying the whole company on its back.

Speaker 3It also changes how I think of Amazon as a stock, honestly. You're not really betting on packages anymore. You're betting on server racks.

RachelThat's a good way to put it. The retail side is basically the loss leader that gets people hooked, and the cloud side is where the actual money lives.

Speaker 3Which, if you're a seller on that platform, is a weird thing to sit with. You're the traffic generator for a business that makes its real profit somewhere else entirely.

RachelRight. And that's worth remembering next time Amazon tweaks a seller fee. It's kinda like being the opening band that packs the stadium, but the headliner still takes home most of the merch money.

Speaker 3That's a weirdly good analogy.

RachelI have layers, Rachel.

Speaker 3Sure you do. But seriously, if you're a third-party seller, you should be watching that operating income number just as closely as the run rate because that's the cushion Amazon is working with when they decide what to charge you next.

RachelRight. A company with that much margin doesn't need to nickel-and-dime sellers, but it also means they can afford to do so if they want to.

Speaker 3Shopify is not far behind on the good news front either.

RachelOh, yeah. Tell me.

Speaker 3Revenue up 34%, free cash flow margin at 18%, and their president, Harley Finkelstein, called it a monster quarter, largely thanks to AI-powered commerce.

RachelI mean, an 18% free cash flow margin at that scale is nothing to sneeze at, AI buzzword or not.

Speaker 3No argument there. That's the kind of number that actually shows up in a shareholder's pocket, not just a press release.

RachelEverybody's suddenly AI-powered this quarter, huh?

Speaker 3Definitely. Every earnings call needs an AI mention now, whether or not it's actually doing the heavy lifting.

RachelI mean, some of this growth is just good old-fashioned more people buying stuff online.

Speaker 3Sure, but AI-powered commerce sounds a lot better on a slide than we sold more socks.

RachelFair point.

Speaker 3I'll hold my actual skepticism for later because there's a number coming up that's going to test it.

RachelOoh, foreshadowing. I like it.

Speaker 3Eighteen% free cash flow margin at that scale is genuinely strong, don't get me wrong. And look, I'll take real cash flow over a vague AI mention any day. But I still wanna see it hold up over a couple more quarters before I call it a trend.

RachelFair. One good quarter doesn't make a permanent shift. So both companies basically had a great quarter on paper.

Speaker 3Great on paper is exactly the phrase I'd use.

RachelYou know what I mean?

Speaker 3Big numbers are fun, but they're not the whole story this week, Max.

RachelWhat do you mean?

Speaker 3Shopify's also handing merchants some new homework alongside all that growth. New rules, new deadlines, and not everybody's going to love them.

RachelHomework, huh? Now I'm nervous.

Speaker 3You should be.

RachelShopify's handing out homework, but what's actually due?

Speaker 3So quiet how?

RachelYour store still works, checkout still works, but your conversion tracking just stops. No error message, no pop-up. You just wake up one day and your analytics look like nobody's buying anything.

Speaker 3That's terrifying for anyone running paid ads off that data.

RachelRight? You'd be pulling budget from a campaign that's actually working because the tracking pixel silently died weeks ago.

Speaker 3Okay, that's the kind of deadline that actually costs money. What else is on the list?

RachelManaged Markets, that's Shopify's cross-border tool, is dropping Deliver Duty Unsupported on August twenty-fourth.

Speaker 3Break that down for people who don't sell internationally.

RachelSo DDU means the customer pays duties when the package shows up at their door. Once that option's gone, merchants using Managed Markets have to shift to duties paid upfront at Checkout.

Speaker 3Which changes your pricing math overnight.

RachelExactly. And if you don't touch your settings, you could end up eating those costs yourself or surprising customers with a bill they didn't expect.

Speaker 3That's neither a good customer experience.

RachelNope. Imagine ordering something, thinking you paid for the whole thing, and then a courier's at your door asking for more money before they'll hand over the box.

Speaker 3That's the fastest way to lose a customer for life, honestly. One bad surprise at the door, and they're never ordering from you again.

RachelRight. And merchants who don't even realize their settings changed underneath them are the ones who are gonna eat that.

Speaker 3So step one for anyone listening is just go check your Managed Markets settings this week.

RachelSeriously, don't wait.

Speaker 3How long does that actually take, realistically, for someone running a small store?

RachelHonestly, maybe twenty minutes if you know where to look. It's just that nobody knows to look until it's already a problem.

Speaker 3Which is the worst kind of fix, cheap and fast, but only if you know it exists.

RachelAnd then there's the one that's actually kinda cool. Since August fifth, Shopify's had this thing called Agent Callable WebMCP live on storefronts.

Speaker 3Wait, agent callable, like AI agents?

RachelYeah. It lets an AI agent interact directly with the store, browse, maybe even check out without a human clicking through pages.

Speaker 3So you could have a shopping bot literally buying from your store on someone's behalf.

RachelThat's the idea. It's live now, quietly, for anyone who wants it. It's a little like handing your store keys to a very polite robot shopper. Most of the time it just browses, but eventually, some of these agents are gonna be checking out too.

Speaker 3Great. Now I have to optimize my product pages for robots and humans.

RachelWelcome to the future.

Speaker 3That's a genuinely different shape of traffic to think about. Your analytics dashboard is used to counting humans, not agents doing the browsing for them.

RachelRight. And I don't think most merchants have even wrapped their heads around what that means for how they optimize a product page.

Speaker 3Okay, but here's my actual question. What happens to a merchant who just doesn't touch any of this?

RachelThe best case, they lose visibility into their own sales data. Worst case, on the duties thing, they're refunding angry customers.

Speaker 3So this isn't a nice to have upgrade. It's closer to if you skip it, something breaks that you won't notice until the numbers are already wrong.

RachelThat's basically it. Three separate deadlines, three separate ways to get burned if you're not paying attention.

Speaker 3And none of them come with a big banner ad. You have to actually go dig for this stuff.

RachelWhich, you know, most merchants running their own store on a Tuesday are not doing.

Speaker 3Fair.

RachelOkay. So platforms are moving fast, but I've got a story that shows growth doesn't always buy you stability.

Speaker 3Oh, this is the one you were teasing earlier.

RachelYep. Good numbers, and then something nobody expected. Okay, this is the one. Etsy just had a good quarter, and it still cut people.

Speaker 3Wait, hold on. Good quarter and layoffs? That doesn't add up. CNBC reports Etsy is cutting about two hundred and twenty jobs, roughly twelve percent of the company. Twelve percent, that's like one in eight people gone.

RachelMostly in product and engineering too, not some random back office trim.

Speaker 3Right after they just sold Depop, right?

RachelYeah, that deal to eBay closed for one point four billion, and days later, boom, the cuts land.

Speaker 3Days later. Not months, days.

RachelAnd here's the part that actually gets me. This wasn't a bad quarter dressed up nice.

Speaker 3What do you mean? This wasn't a bad quarter dressed up nice.

RachelWhat do you mean?

Speaker 3The layoffs came alongside an actual earnings beat, plus Etsy announced a brand new two billion dollar buyback.

RachelSo they beat the numbers, told shareholders, "Here, take some cash back," and then cut twelve percent of staff in the same breath.

Speaker 3Basically, beat plus buyback plus bodies out the door all in the same window.

RachelI mean, come on. That's a weird flex. We're doing great. Also, goodbye.

Speaker 3It's not really a flex, is it? It's a signal.

RachelYeah. What's it signaling to you?

Speaker 3That the buyback is for investors and the layoffs are for the P&L. Two totally different audiences, same press cycle.

RachelSo it's not the company's confidence, it's just managing two different books at once.

Speaker 3Exactly. And that's the disconnect nobody's really talking about. Good numbers on the surface, and underneath, Etsy is telling engineering the current head count is not what they need going forward.

RachelWhich honestly makes the earnings beat feel less like a victory lap.

Speaker 3Right. Because if the model actually worked the way the stock price wants you to believe, you wouldn't need the trim right after.

RachelSo growth and stability just aren't the same thing.

Speaker 3They're not. A marketplace can post a beat and still decide its structure needs less people to run it.

RachelThat's kind of unsettling actually for anyone selling on Etsy right now.

Speaker 3It's unsettling for anyone who works there.

RachelI keep coming back to the timing though. Selling Depop then trimming staff almost immediately after, that's not a coincidence. That's cleanup.

Speaker 3Right. When you offload a division, you don't need all the people who were supporting it, even indirectly.

RachelMakes sense operationally. Doesn't make it feel any less brutal if you're one of the people affected. You have to wonder how many other companies are doing the same math behind closed doors right now, just quietly deciding fewer people can run the same business.

Speaker 3Probably more than we'd like to think. A buyback tells you the board likes the balance sheet. It doesn't tell you the board likes the org chart.

RachelThat's a great way to put it, honestly. Two different conversations happening in the same building.

Speaker 3And sellers on the platform are left reading tea leaves, trying to figure out if this means less support, slower fixes, fewer new features.

RachelYeah, and that uncertainty is its own cost, even before anything actually changes. You start hedging, maybe diversifying where you sell just in case.

Speaker 3Which, ironically, is the exact opposite of what a company wants its sellers doing right after a strong earnings report.

RachelFair. So while Etsy's tightening up online, who's actually doing the opposite?

Speaker 3Because somebody out there is doubling down on the physical side of retail instead of pulling back.

RachelOkay, now I'm curious. Who?

Speaker 3Walmart's Q2 numbers just dropped too, and there's one stat that stuck with me. Seventy percent of their online orders now show up same day or faster.

RachelWait, seventy percent? That's, like, more than two out of three packages beating your own trip to the store.

Speaker 3Right. And MarketScale's read on it is the interesting part. They're saying the bottleneck isn't the website anymore, it's the stores themselves.

RachelSo the store is basically a mini warehouse now.

Speaker 3Exactly. Every Walmart becomes a same-day fulfillment node, and the limit is how fast humans inside that building can pick and pack, not how fast the site loads.

RachelThat's a real shift, though. Websites used to be the excuse for everything being slow.

Speaker 3Now the excuse is aisle five.

RachelFair.

Speaker 3It also flips the whole conversation about where retailers should be investing. For years, everyone poured money into the site experience.

RachelAnd now the smart money's going into staffing and store layout instead.

Speaker 3Right. Because a beautiful checkout page doesn't matter if nobody can find the item on the shelf fast enough to get it out the door same day.

RachelThat's a genuinely different skill set for a retailer to build too. That's operations, not marketing. It's kind of like a restaurant kitchen versus the dining room. You can have the nicest dining room in town, but if the kitchen can't turn out plates fast enough, nobody's happy.

Speaker 3I like that. Though I'd hate to see what aisle five looks like on a Friday night rush.

RachelControlled chaos, probably. But that's the new competitive edge. Not the app, the aisle.

Speaker 3Speaking of stores getting reorganized, Kroger's making moves too.

RachelOh yeah, I saw this. They brought in a new e-commerce chief.

Speaker 3Nate Faust, starting September first as Executive Vice President and Chief E-commerce Officer.

RachelAnd didn't they also do something with, like, greens?

Speaker 3Yeah, BrightFarms. Greenhouse-grown produce out of Texas, now sitting in over 1,000 Kroger stores across the Dallas market.

RachelA thousand stores just for lettuce?

Speaker 3Basically. But it tells you Kroger's playing both sides. Hire the digital guy, fix the produce aisle, try to look like a company that's actually turning a corner.

RachelMakes sense. You can't out-app your way past soggy spinach.

Speaker 3No, you cannot. It is a smart pairing, though. You bring in someone to run the digital side while also making sure the actual product on shelves gives people a reason to walk in.

RachelYeah, digital and physical reinforcing each other instead of competing for the same budget. It's kind of a nice contrast to Etsy, actually. Here's a company hiring into eCommerce leadership and expanding its physical footprint at the same time instead of trimming either one.

Speaker 3Right. Two very different plays for two very different business models.

RachelOkay, before I forget, this one's smaller, but it caught my eye. Canada's retail numbers came in.

Speaker 3What'd they do?

RachelStatistics Canada says sales rose zero point six percent in June, up to seventy-four point three billion Canadian dollars.

Speaker 3That's steady, not explosive.

RachelRight. But here's the number that matters. E-commerce sales inside that jumped nine point nine percent.

Speaker 3So the overall pie barely moved, but online's eating a much bigger slice.

RachelExactly. Almost ten percent growth while the whole market crawled at half a point.

Speaker 3Which is exactly why platforms keep fighting so hard over that slice.

RachelYeah. Okay, one more before we wrap. This one's for any sellers listening.

Speaker 3Go for it.

RachelAmazon's put out its Q4 deal calendar, and the deadlines are coming fast. Prime Big Deal Days submissions close September eighth.

Speaker 3That's not far off.

RachelNope. And Black Friday, Cyber Monday deal submissions close October twentieth.

Speaker 3So if you're a seller sitting on a Q4 promo plan-

RachelGet it in now. Don't wait till the week before, because these deadlines don't move for anybody.

Speaker 3Good advice. Missing that window means missing the biggest shopping weekend of the year.

RachelWhich, for a lot of sellers, is basically their whole quarter.

Speaker 3Okay, that is a lot to sit with this week.

RachelIt really is. AWS, Shopify, Etsy, Walmart, Kroger, Canada, Amazon sellers.

Speaker 3Let's bring it home.

RachelShh.

Speaker 3Can we just sit with the whiplash for a second? Same week, big numbers up top, then people out of a job by Friday.

RachelYeah.

Speaker 3A beat and a buyback look great in a slide deck. They don't tell you if your role still exists in September.

RachelRight. And that's kind of the takeaway, isn't it? The headline number and your actual job security are two totally separate questions now.

Speaker 3Exactly. Ask that question about your own company, not just the ones we talk about.

RachelYeah, and it's not just a big company problem either. Even a small store owner listening right now should be asking whether their growth is actually translating into something stable or just looks good in a monthly report.

Speaker 3Exactly. Growth on paper and stability in practice are not the same test.

RachelIt's a good filter for reading any of this news, honestly. Don't just look at the top line. Look at what's happening underneath it.

Speaker 3Right. The top line tells you the story the company wants told. The underneath is where the real decisions live. Anyway, that's enough seriousness for one episode.

RachelOkay. Well, on a lighter note, I looked into why Amazon needs that much server space, and turns out it's mostly just powering my group chat's group chat.

Speaker 3That tracks, honestly.

RachelI mean, come on, forty photos of someone's dog needs a warehouse somewhere.

Speaker 3Sure. Blame the dog.

RachelAlways blame the dog.

Speaker 3Alright. That's the show. Lots to watch heading into next week. Hit follow so you don't miss it.

RachelYeah. We'll be back with whatever chaos drops next. Thanks for hanging out with us.

Speaker 3See you next week.