• Amazon’s customers are buying cheap products, the retailer’s top execs said in its Thursday earnings call.
• Those products are being purchased frequently and in larger amounts, the execs added.
• Amazon reported a strong third quarter, beating Q3 earnings expectations.

Amazon’s customers are buying its cheaper products, but at a higher volume, the company said, announcing a positive slate of third-quarter earnings.

“At a time when consumers are being careful about how much they spend, we’re continuing to lower prices and ship even more quickly, and we can see this resonating with customers as our unit growth continues to be strong and outpace even our revenue growth,” Andy Jassy, Amazon’s CEO, said in an earnings call on Thursday.

And customers are increasingly using the platform to buy cheaper everyday household items, like “health, beauty, and personal care as well as nonperishable grocery,” Brian Olsavsky, Amazon’s finance chief, said in the call.

While these items “often have a lower average selling price,” Olsavsky said that these buying patterns are still a net positive for Amazon.

“We see that when customers purchase these types of items from us, they build bigger baskets, shop more frequently and spend more on Amazon,” Olsavsky said.

Amazon’s also dealing with a customer base that’s “looking for deals” and “price conscious,” Jassy said.

He said that this consumer behavior “matches up well” with Amazon’s Prime membership and sales events.

Paid Prime memberships have gone up this quarter, Jassy added, which has been “hugely impactful” for Amazon.

Amazon’s cost-conscious customer base

Amid the high cost of homeownership, childcare, and retirement, US consumers have been saving more and cutting back on everything from food and travel to home improvement.

Wells Fargo carried out a survey from September 5 to October 3, 2023, of more than 3,500 US adults and teenagers. Around 67% of respondents said they had slashed their spending due to the economy. And 62% of the survey’s respondents said they had little left for “extras” after paying their monthly bills.

Representatives for Amazon did not respond to a request for comment from Business Insider, sent outside business hours.

Amazon reported strong third-quarter earnings on Thursday. Its net sales for the quarter hit $158.9 billion, outperforming the consensus analyst estimate of $157.3 billion.

Its sales in North America increased 9% year over year to $95.5 billion, while its sales internationally increased 12% year over year to $35.9 billion.

Its net income increased to $15.3 billion — or $1.43 per diluted share — in Q3, compared with $9.9 billion, or $0.94 per diluted share, in the same period last year.

Shortly after the results, the company’s stock climbed more than 6% in volatile after-hours trading. Despite a 3.3% drop during regular trading on Thursday, the stock is still up about 23% so far in 2024.