Although Amazon.com (NASDAQ:AMZN)struggles with profitability, the company has made its founder and CEO very wealthy.
A self-made billionaire, Jeff Bezos spent his time on Wall Street, becoming the youngest senior vice president at investment firm D.E. Shaw before leaving in 1994 to found what started as an online bookstore. At the time, the future billionaire's move was seen as risky at best and preposterous at worst.
In 1994, the Internet wasn't the gold rush it would become a few years later. It was a virtually unknown commodity. Bezos walked away from a lucrative career to found Amazon in the days when "going online" meant dialing up AOL, which was still known as America Online. So leaving Wall Street for an Internet start-up in 1994 was daring, but for Bezos it paid off spectacularly.
How did Bezos make his money?
Like so many tales of digital wealth, Bezos' starts in his garage -- or at least the garage of the house he moved to in Seattle, where he chose to relocate to pursue his dreams of a digital bookstore. In those days, building a website was something done entirely from scratch. With a small team, Bezos built Amazon.com before Internet retail was a thing.
When the site launched, despite the limited online audience, it was an immediate hit, according to Biography.com:
The initial success of the company was meteoric. With no press promotion, Amazon.com sold books across the United States and in 45 foreign countries within 30 days. In two months, sales reached $20,000 a week, growing faster than Bezos and his start-up team had envisioned.
From there, the company has essentially been on a non-stop growth path. Bezos and his team took Amazon public in 1997 -- a time when the retailer was still just an online bookstore. The first product diversification came in 1998, when the company branched out into CDs and videos. From there it was off to the races, as the retailer added product lines to the point where now it sells everything from groceries to clothing.
There were bumps along the way. The early question was whether Amazon.com would survive as bricks-and-mortar retailers launched their own digital stores, and it did, without much trouble. The second question -- and this is one Bezos struggles with to this day -- is whether the company spends too much money given its razor-thin profit margins.
Bezos has been a heavy investor in building out Amazon's shipping and delivery infrastructure. He believes in pursuing seemingly far-fetched projects such as drone delivery and robotic order fulfillment. His strategy has not been without its detractors, but the CEO has made himself unbelievably wealthy on the back of the stock's success.
What is Bezos' net worth?
Ranking No. 15 on Forbes' 2015 billionaires list, Bezos had a net worth of $39.3 billion as of June 20. The CEO, who also owns The Washington Post, has a fairly fluid net worth because so much of his fortune is tied up in Amazon stock.
In 2014, for example, Bezos saw his net worth tumble (at least comparatively) when his company's stock performed poorly. He lost $7.4 billion in net worth that year, according to The Wall Street Journal: "Shareholders punished Amazon for its free spending on projects such as the Fire smartphone and other gadgets and a widening network of warehouses close to urban centers."
Rough patches have not stopped Bezos from investing in projects that won't pay out for a long time and that could leave Bezos' fortune vulnerable to wide swings as investors tend to send the company' stock lower in quarters where R&D costs drive profits down or create losses.
Still, With Amazon Bezos has built one of the most powerful companies in the world. By taking the long view and investing in improved shipping specifically, he should eventually reap the benefits and grow his incredible net worth.
Daniel Kline owns shares of Apple. His Amazon consumption has in some way helped Bezos get this wealthy. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.