To achieve its first-ever net profit, the Web retailer honed its distribution operations and cut deals to boost revenues. Here's how it made the grade:


Fewer items were put in the wrong locations in its distribution centers, and it shipped 35% more units with the same number of workers as a year ago. That helped cut fulfillment costs by $22 million last quarter, despite a sales increase of 15%.


Using software to more accurately forecast purchasing patterns by region, Amazon (AMZN ) slashed inventory levels by $31 million, or 18%, in the fourth quarter.


Allowing other sellers to offer used books and other merchandise on helped boost unit sales in the holiday season by 23%, to 38 million. Amazon's cut ofrevenues carries gross margins of at least 85%.

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