Much of the general public sees Amazon (AMZN 1.24%) as an e-commerce behemoth and little more. After all, it owns 38% of the U.S. market, with Walmart a distant second at just 6%. As investors, however, we need to look much deeper.

Amazon is transforming from a product-based company into a service-based company before our eyes. This is terrific news. Selling discount products online has never been particularly profitable for Amazon. But business lines like Amazon Web Services (AWS), with its 29% operating margin, are extremely lucrative. Amazon needs its e-commerce sales to drive the brand, but transitioning to a service-based financial model will bring profits to investors.

And Amazon's service-based sales are growing:

Amazon revenue streams as of Q4 FY22.

Source: Amazon.

Want more good news? 2022 marked the first time in the company's history that service sales accounted for more than product sales.

Let's look at some revenue streams that are most important to the company's future.

AWS is essential in more ways than one

With so many businesses dependent upon the cloud, it is indispensable in modern commerce. And AWS is the dominant cloud services provider in the world, with a 34% market share. AWS growth has slowed recently as enterprises grapple with the challenging economy, but this is a short-term headwind. More businesses are embracing cloud-based applications and storage, and the data needs will continue to grow. More demand means more revenue for Amazon over the long haul.

AWS is just as vital to Amazon's success. This highly profitable segment accounted for over 90% of the company's operating income since 2020, as shown below.

Amazon's operating income, AWS vs. the rest of the company.

Data source: Amazon. Chart by author.

Luckily, the cloud services market is projected to increase by 14%, compounded annually through 2027, giving AWS ample growth runway.

Watch these other blossoming revenue streams

Third-party-seller services, digital advertising, and subscription services (like Amazon Prime) also grew steadily in 2022, as depicted in the opening section. Amazon's third-party services, like commission and fulfillment fees, provide the company's second-largest income stream, and the 20% growth there is impressive.

Digital advertising is an exciting recent development. Ad revenue has nearly doubled from $19.8 billion to $37.7 billion since 2020. Amazon allows advertisers to feature their products to consumers who are ready to buy. This type of targeted advertising is efficient and critical as businesses look to restrain budgets.

Amazon Prime has at least 200 million members worldwide. Not only does this provide Amazon with a lucrative stream of cash, but it drives sales in other areas.

Prime could also become a game changer as Amazon offers its new Buy with Prime initiative. Buy with Prime allows interested retailers to place a Buy with Prime button on their sales sites. A customer clicks the button to pay with their saved Amazon account information, and Amazon will fulfill the order. Amazon will provide comprehensive third-party logistics (3PL) services like storage, shipping, receiving, and returns. The retailer pays fees, gets the services, and benefits from millions of consumers who trust the Amazon brand.

The investors fretting over the slight decline in retail sales are missing the forest for the trees. Amazon will always have its retail business, but investors will profit from its rapid expansion into higher-margin services.