Before we start, the featured image is from MidJourney (which appears to have significant challenges with rendering hands LOL): “a beautiful woman pleased with her online purchase looking at her smartphone photorealistic realistic still life ultra detail…” Anyway, I needed a featured image and discovered MidJourney.
Let’s move to the question at hand: how mad are Amazon Smile shoppers and the nonprofits they support? Mad enough to change their preferred retailer at least some of the time?
Mull that over, and while you do, dive down the Smile rabbit hole with me.
When Amazon announced its shutdown of Smile, giving nonprofits little or no warning, it wasn’t unusual to see a tweet like this:
Amazon claims the Amazon Smile program didn’t have an impact. I can tell you as an animal not for profit it made a huge difference to us. That $9400 meant the world. That isn’t nothing to us. #amazonsmile #amazon @amazonsmile pic.twitter.com/O67cPhQ3rV
— Crouton & Friends🏳️🌈 (@m_crouton) January 19, 2023
The Numbers Don’t Lie
Let’s dig into the numbers. Amazon is a gigantic retailer and in its most recent earnings statement prior to the Smile cancelation, Amazon reported $64.53 billion in eCommerce revenues in Q4 2022. Most of their profit came from their other divisions.
Most Smile donation revenue came from US shoppers supporting US charities at a rate of .5%, and approximately 5/6ths of Amazon revenue is US (unclear if that ratio holds for retail vs cloud). Let’s assume that it’s directionally accurate.
I have taken screenshots of Amazon Smile donations over the years as a founder of Giving Forward, a nonprofit and a passionate cause marketer. By working backwards, one can approximate the percentage of sales generated by Smile shoppers on Amazon in 2022 and how that changes Amazon’s profit for 2023.
What percentage of total sales is this US $ donation level for the last year or the last quarter? Let’s play detective.
Amazon had a gangbusters pandemic, so let’s look at their pre-pandemic Smile numbers:
Not quite end of the year 2020, but close. A bit of Googling finds a screenshot for February 2021
In that span of three months, the US donation number grew by $24,283,530; given partial Holiday 2020 and continued 2021 growth, one could conclude an annualized 2021 donation level of $97,134,121
Let’s move on: November 2022
This screenshot suggests $377,373,635.55 as of October 2022, an intervening 20 months, annualized into a donation amount, we get $116,108,266 per year, higher than the previous estimate of $97 million by projecting forward.
Let’s go back to the US donation totals for the end of 2022: $400,026,236.70. The two months intervening between October and the end of 2022 brought in $22,652,601 in donation revenue. Admittedly, that’s Q4 — peak shopping — but the annualized estimate based on that data puts us conservatively in the range of $100 million in annual donations driven by Smile shoppers globally, were they to continue to buy at the same level in 2023.
Now it gets interesting, and we have to use conservative estimates. $100 million in donations driven from the buying behavior of Smile shoppers means that those shoppers represent $20,000,000,000 in annual US sales…. YEP… $20 billion!
Estimates of 2023 Amazon eCommerce revenue are in the range of $230 billion. Smile ANNUAL revenue is quite material. Smile donation is half a percent (50 basis points) and with ecommerce revenue of $20 billion attributable to Smile, that is material when it drops to the bottom line, but the .5% dropping to the bottom line only happens if Smile shoppers stick with Amazon.
Don’t Frown: A Smile Alternative is Here For You
My nonprofit is betting some shoppers who loved Smile will stray and use the nonprofit charity mall at Giving Forward. With hundreds of stores, merchants and service providers, nearly everything a consumer or business could need is available, at a great price and with donation levels to nonprofits dramatically higher than Amazon’s .5%. Major merchant partners to be announced in March!