How to Buy Amazon Stocks for Beginners – With Low Fees

Leading online retailer and tech giant Amazon is widely considered to be a buy across Wall Street, so now could be the perfect time to invest.

In this guide, we explain how to buy Amazon stock with 0% commission.

We also reveal where to buy Amazon stock by reviewing the best brokerage sites to execute your trading order and talk about the potential benefits and pitfalls of investing in Amazon.

Note that if you allocate $10 to a high-value stock like Amazon, you are purchasing a fraction of a stock.

This is great for newbies who want to lessen the risk or anyone who wants to build a diverse portfolio of large-cap stocks on a smaller budget.

You will see a more detailed step-by-step walkthrough of how to buy Amazon stock shortly.

Step 1: Decide Where to Buy Amazon Stock

Publically traded stocks vary in price by some distance, and Amazon is over $3,000 per stock at the time of writing. As such, when you’re deciding on where to buy Amazon stocks, you might elect to do so at a brokerage that supports fractional trading.

This allows you to allocate smaller amounts to gain exposure to the company. To help you decide where to buy stocks, we’ve reviewed the very best brokers in the US.

Each platform will allow you to buy Amazon stock in fractional quantities. Most importantly – each platform holds a license from the SEC and are members of FINRA.

1. eToro – Overall Best Place to Buy Amazon Stock

eToro is a top brokerage that offers the overall best platform from which to buy Amazon stock. When you buy stocks on eToro, you won’t pay any commission to invest in any of the 3,000+ stocks the broker offers access to. This trading platform is easy to use and offers access to over a dozen stock markets, covering the US,  Canada, UK, Australia, Asia, and more.

Furthermore, we like that you can allocate just $10 when buying Amazon stock as eToro supports fractional stock investing. Signing up for an account to buy Amazon stock takes a matter of minutes, so you can have your account confirmed pretty much right away. You can also access the plethora of exchanges, manage your portfolio and invest in stocks via the eToro stock app.

Moreover, US clients do not need to pay a deposit fee and have plenty of supported payment types to choose from. This includes credit and debit cards, bank wire transfers, and also e-wallets such as PayPal, Skrill, and Neteller. The minimum deposit is just $10. If you decide to trade more than just stocks, you can also buy and sell over 250 ETFs with 0% commission via this brokerage.

At eToro, you can mirror the positions of top-performing stock investors by allocating some funds to copy trading. This is a simple case of investing $200 or more to a pro-investor. Any buy or sell order fulfilled by the seasoned investor will also appear in your portfolio. This is a passive way to build a diverse portfolio of top-performing stocks.

Similarly, you can check out the smart portfolio section on the main eToro dashboard. Put simply, eToro has put together a selection of fully allocated and weighted portfolios, allowing you to invest in a balanced and carefully chosen basket of stocks via one order. There are various smart portfolios that are composed of tech assets. The minimum investment, in this case, is $500.

What We Like:

Your capital is at risk.

2. Webull – Buy Amazon Stock From Just $5 

Webull is another top broker to consider when you’re making your mind up on the best place to buy Amazon stock. The site is easy to navigate and also offers commission-free trading on US stocks, which means you will only have the spread to pay when you invest in Amazon stocks.

You can allocate just $5 when partaking in fractional trading at Webull. Like at eToro, there are thousands of stocks listed here. With that said, you won’t find many internationally-listed stocks at this brokerage, apart from a selection of ADRs. For a more detailed comparison of eToro vs Webull read our complete review here.

Do be aware that ADRs sometimes invite depositary service or custody, fees, and at Webull this usually ranges from $0.01 to $0.03 per share. Accepted payment types include ACH and bank wire transfers. and Webull does not stipulate a minimum deposit. Bank wire transfers attract a fee of $8 on each transaction when making a deposit and $25 per withdrawal.

There aren’t any copy trading features at this brokerage. However, we found a few tools, such as a variety of order types, screeners, news and data, and adaptable charts with various timeframes. Additionally, US clients can buy cryptocurrency by allocating just $1. There is also the option to invest in Amazon stock via an IRA.

Your capital is at risk.

Step 2: Research Amazon Stock

Part of the process of investing in this company is deciding where to buy Amazon stock. However, it’s crucial you research Amazon in full before allocating any funds.

As such, this step will cover everything from what the company does and how its stock has performed, to whether it will represent a good addition to your portfolio.

What is Amazon?

US-based Amazon was founded in 1994 and is a multinational tech and retail company. The firm concentrates on e-commerce, digital streaming services, cloud computing, and AI.

Amazon is now one of the world’s most recognized and valuable brands of its kind. This vast enterprise sells everything from housewares, electronics, and furniture to toys, books, and stationary.

Furthermore, the company offers cloud services – which include renting out computer resources, and data storage on a large scale.

• Amazon Web Services (AWS) was created in 2002, and it first provided data on website popularity, internet traffic patterns, and other information for marketers and developers.
• The Elastic Compute Cloud (EC2), which leases out computer processing capacity in tiny or large amounts, was added to AWS’s offering in 2006.
• Amazon’s Simple Storage Service (S3), which leases out data storage online, was launched the same year.

As of 2022, around 200 million individuals have signed up for Amazon Prime throughout the world. By 2026, Amazon Prime Video is predicted to have over 240 million members globally.

Younger demographics appear to be the most regular users of Amazon’s video offerings as more people than ever look to streaming services for entertainment.

Amazon Stock Price – How Much is Amazon Stock Worth?

Amazon now has since surpassed a market capitalization of over $1.7 trillion. Amazon became a publically listed company on the NASDAQ in 1997, with an initial IPO price of $18. This would be more like $1.50 per stock taking the company’s three stock splits in the 1990s into account.

If you had allocated $1,000 to Amazon when stocks first hit the NASDAQ, your investment would be worth over $2.2 million at the time of writing. Over the last five years of trading, Amazon has outperformed the NASDAQ Composite. Amazon stocks have increased in value by over 280%, whereas the NASDAQ Composite has risen by 143% in the same period.

Amazon stock plunged in early 2022 but is now showing signs of recovery. Stocks have risen 20% from $2,720 to $3,380 since March 8, the day before Amazon announced a 20-for-1 stock split – a gain of just over 24% in around two weeks. On June 6, 2022, the most recent stock split will take effect.

Even though its intrinsic value will not be changed by the impending split, many market analysts think now is the time to buy Amazon stock as the stock price is likely to increase.

Amazon Market Capitalization 

At the time of writing, Amazon is in the top 5 companies in terms of market capitalization, alongside the likes of Microsoft, Saudi Aramco, Google and Apple. With this being said, you may want to diversify your portfolio and look at how to invest in apple stocks due to their market value. At this time, Amazon carries a market capitalization of over $1.7 trillion.

Amazon Index Funds

Amazon is a member of multiple indices. This includes the NASDAQ Composite and NASDAQ 100, the S&P 100 and 500/Consumer Discretionary, and the Russel 1000 and 3000.

EPS and P/E Ratio

For the three months ending in December 2021, Amazon’s EPS was almost $28. Meanwhile, its trailing twelve months (TTM) EPS ending at the same time was $64.78.

In terms of its P/E ratio – which indicates what the market will pay as of writing, based on earnings in the past and present, this stands at 52.17 times without NRI.

The stock’s highest P/E ratio without NRI was around 3,732 times for the last 13 years, while 44 times was the lowest. The median P/E during this period was 149.26 times.

Amazon Stock Price Prediction

In 2021, Amazon’s sales increased by 22% to $470 billion. This boosted the company’s operating profit to $24.9 billion, which illustrated a 9% increase.

According to Amazon, the retail division has remained in peak mode since the COVID-19 pandemic began. Meanwhile, the company’s AWS cloud hosting service saw a 40% increase in sales last year.

• Despite these great figures, 2021 was far from flawless for Amazon.
• After financing charges, the corporation faced cash outflows of $20 billion due to a substantial increase in expenditures.
• Profits are expected to decline in 2022, compared to the high levels reached in 2021.

With that said, most market analysts foresee a robust return to growth in 2023 and think Amazon stock will continue to rise in the long term.

Some market commentators have predicted that stock could increase to as much as $5,000 in 12 months’ time. However, you should never invest based purely on Amazon price predictions.

Amazon Stock Dividends

Since its founding, Amazon has never paid dividends to its investors.

Instead, gains are used by the company to develop and expand into other areas, which should benefit you when you buy Amazon stock.

Is Amazon Stock a Good Buy?

You can look at a range of different metrics to help you decide whether to buy Amazon stock.

We’ve listed a number of core benefits of investing in this trillion-dollar company below to help you make an informed decision.

Amazon Benefits from the Network Effect

The network effect is a phenomenon that occurs when the estimated value of a service (or product) improves as more people use it.

As such, when researching how to invest in Amazon stock, you will probably see this term used to describe the company. The firm’s brand has grown tremendously powerful as a result of the network effect, amongst other things.

For instance:

• When customers flock to Amazon’s website, the platform becomes more appealing to businesses looking for new customers
• As more vendors join the Amazon marketplace and eventually provide a bigger quantity and diversity of products, a higher quantity of online shoppers will use the website
• In 2021, Amazon’s third-party merchants topped 6 million, with the business adding 2,000 new vendors every day
• Meanwhile, the number of Prime members is increasing at a rate of 30 million people each year, according to estimates

The network effect has allowed Amazon’s e-commerce operation to continue to grow at speed and is showing no sign of slowing down.

Amazon is consistently ranked among the world’s most valuable brands. For instance, Amazon came fourth place in Forbes’ most recent ranking of global companies.

Amazon is Dominates Online Retailing 

Amazon is one of the most popular shopping sites in the world.

Amazon is able to provide a variety of benefits to its customers, such as:

• Customers all over the world are attracted to Amazon’s lower-cost and widely varied choices. This should ensure Amazon’s dominance in the e-commerce market
• The company holds a market share in the US e-commerce business of over 45%.
• As of late 2021, Amazon Prime is offered in 22 countries. In the US alone, nearly 1 in every 3 people pay for an Amazon Prime membership
• Amazon ships an estimated 1.6 million packages each day. This equates to daily revenue of almost $610 million
• Retail subscription fees alone brought in $25.21 billion for Amazon last year

This positions the company well for future success, which should benefit stockholders looking to invest in Amazon stock for years to come.

Amazon is a Cloud Computing Pioneer

As you may have discovered when researching how to buy Amazon stock, the company is a pioneer in cloud computing.

This is a sector that is expected to develop at a compound annual growth rate of over 16% through 2026, according to some market commentators.

• Amazon Web Services (AWS) has risen to the top of the cloud market
• Specifically, as of the fourth quarter of 2021, AWS has a share of over 30% of the $180 billion market
• Microsoft Azure, Amazon’s closest competition, came in second with a market share of just over 20%
• Interestingly, Amazon’s cloud computing division now has far higher profit margins than its traditional e-commerce division
• The company’s net sales in 2021 were $469.8 billion, with AWS contributing over 13% of the total, or $62.2 billion
• AWS’ operational income of $18.5 billion, on the other hand, accounted for over 74% of the company’s overall operating income of $24.9 billion in the same year

Cloud computing solutions, such as analytics and data storage, provide significant benefits to organizations.

This includes greater flexibility, lower costs, and increased productivity. As such, the company’s bottom line should benefit as AWS grows to account for a bigger share of Amazon’s sales.

Risk of Opting to Buy Amazon Stock

Wherever there is a potential reward, there will be risks to consider.

To help clear the mist, see some potential pitfalls listed below along with an explanation of how this might affect you if you buy Amazon stock.

Amazon Faces Pressure From Oil Fuel Prices

The worldwide demand for oil dwindled during the outset of the COVID epidemic. As a result, the Organization of Petroleum Exporting Countries (OPEC) cut the oil supply to keep prices under control.

However, as demand for oil rises again and we recover from COVID, OPEC has not boosted production to fulfil that demand.

Furthermore, Russia’s conflict with Ukraine has put additional downward pressure on the price of oil. Economic sanctions against Russia have been imposed by the US and other Western countries, crucially, this includes oil embargoes.

The issue is that Russia is the world’s third-largest oil producer, after the US and Saudi Arabia. Fuel costs have risen as a result of countries refusing to trade with Russia.

So, how might this affect you when you buy Amazon stock? Well, there is a chance this could result in a significant rise in Amazon’s e-commerce operational costs.

This is especially true when you consider Amazon’s ‘Last Mile Delivery’ which gets items to consumers’ hands in a timely manner.

This is because it is one of the most expensive aspects of the company’s e-commerce operation, and is also mostly reliant on gas-fueled vehicles.

Competition is Always a Potential Pitfall

Both specialist e-commerce platforms and social media companies are putting pressure on Amazon. Furthermore, the distinction between social media enterprises and e-commerce platform providers is becoming increasingly blurry.

For instance:

• In mid-2020, Meta launched Facebook Shops
• According to Meta, this is a new program that allows businesses to open a free online store on Facebook and Instagram
• Snapchat, on the other hand, is betting on augmented reality e-commerce
• Specifically, Snapchat is experimenting with offering products using camera overlays in its cell phone app. This will allow users to try on new shoes or makeup shades virtually
• Amazon is also up against niche e-commerce competitors such as Wayfair and Etsy

Although these specialized businesses are unlikely to take considerable retail market share from Amazon, they may constrain the company’s future development in some product categories.

An example of this was ‘Handmade at Amazon’, created in 2015, which struggled to compete with Etsy in the sector of handcrafted goods.

All in all, when you buy Amazon stock, it’s imperative you keep one eye on the competition.

Step 3: Open an Account and Buy Amazon Stock

We analyzed the top brokers in the US and discovered the best place to buy Amazon stock is eToro. Now you know where to Amazon stock, let’s talk through the actual investing process.

You can risk just $10 on Amazon stock at this brokerage – as the platform supports fractional stock investing. Plus, you won’t pay any commission.

Step 1: Open an eToro Stockbroker Account

Opening an account with eToro is simple for investors with all levels of experience. Head over to the platform and hit the button marked ‘Join Now’.

You will be presented with an online registration form that requires you to enter some basic information.

Add your chosen username and password. You will also need to include your full name, email address, and cell phone number. Hit ‘Create Account’ once you’ve completed the relevant fields.

After confirming your cell phone number and email, eToro will also require you to enter your address, date of birth, social security number, and answer a few basic questions to offer you the best service.

Step 2: Upload ID

Next, you can complete the KYC process, which takes minutes at eToro. Upload a scan or clear picture of your photo ID so the broker can validate your name.

This can be a passport or any other government-issued ID.

To complete the KYC process so you can buy Amazon stock, attach a copy of a recent bill or a statement from your bank.

This should show your name, address, and date of issue. You will find a full list of supporting documents at eToro.

Step 3: Deposit Funds

Prior to placing an order to buy Amazon stock, you will need to make a deposit. You can add funds to your account with ease by selecting one of the many payment types listed.

This includes debit and credit cards, online banking, and wire transfers. E-wallets are also accepted and include Skrill, Neteller, and PayPal.

As we touched on earlier, US clients will not be charged a deposit fee. You can get started by allocating just $10 to your account.

Step 4: Search for Amazon Stock

To buy Amazon stock you’ll need to find it on the eToro website. Simply type the name of the company into the search bar and this will result in Amazon stock appearing from a drop-down box.

When you see Amazon in the list of markets, hit the button marked ‘Trade’ to let eToro you wish to place an order.

Step 5: Buy Amazon Stock

That’s it, you now have a funded account and are ready to place an order to buy Amazon stock with 0% commission.

This part couldn’t be simpler – enter an amount of $10 or more to buy Amazon stock. Any amount you allocate that’s less than the current stock price will mean you are adding a fraction to your portfolio.

To confirm, click ‘Open Trade’.

Amazon Stock – Buy or Sell?

As we mentioned earlier, over five years of trading, Amazon stock beat the NASDAQ Composite by almost 65%. In the past year, however, Amazon’s stock has lagged the broader market.

With that said, many market commentators still believe it represents a great investment in the long-term, and looking at the bigger picture provides some much-needed perspective.

• As well as beating the NASDAQ Composite, Amazon stock has climbed by over 280% over the last five years, compared to only around 94% for the S&P 500
• When you are researching the ins and outs of how to buy Amazon stock, you can look at the company’s recent difficulties, as well as focus on the firm’s long term strategy
• Crucially, this digital behemoth is a market leader with substantial upside potential, and it has a strong economic moat that should keep most competitors at bay

As such, for a variety of reasons, many of which we have talked about today, many market analysts consider Amazon to be a strong buy and thus – expect the stock to rise over the course of time.

Conclusion

It’s never been easier to invest in a company like Amazon. Before investing, however, you should carry out plenty of research. With that said, many market commentators widely consider Amazon to be a strong buy.

When researching the best place to buy Amazon stock, we concluded that eToro is the overall top brokerage. US clients can allocate as little as $10 to buy Amazon stock with 0% commission offered.

There is no deposit fee when funding your account in US dollars and plenty of payment types are supported.  Furthermore, the broker has the approval of multiple regulators alongside a FINRA membership.

Your capital is at risk. 68% of retail investor accounts lose money when trading CFDs with this provider.

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