History of the (North American) Amazon
Amazon has emerged from humble garage beginnings to become a strategic powerhouse with execution to match. In the story of its development is found a series of intelligent strategic decisions with relatively few missteps, in navigating (and in part creating) the new world of e-commerce.
Starting in 1994, Jeff Bezos incorporated a company “Cadabra” after leaving his job at D. E. Shaw and moving to Washington. The company changed to Amazon, selling 5 products via e-commerce initially (CDs, computer hardware/software, videos, and books). From his garage, Amazon became mostly an “online bookstore” saving in inventory; however, there was nothing but the first-mover effect in his favor at the time. It was not profitable until about 7 years later ($5mm, or 1-cent per share, on revenues of >1B). Surviving lawsuits from Barnes & Noble and Walmart, Amazon embarked upon a series of acquisitions and investments over the past 15+ years.
Partnerships with businesses (in terms of running their e-commerce) has gone through various transitions, with companies ranging from Toys-R-Us to Target to DC Comics (for which Amazon got the exclusive digital rights), as well as creative delivery partnerships (e.g. with the U.S. Postal Service, allowing Sunday delivery).
The massive software infrastructure includes offices in U.S., Canada, Ireland, Germany, Netherlands, U.K., Romania, India, Japan, China, and South Africa; customer service centers are more widespread in same and different countries, including South America, West Indies, and other Southeast Asian nations (e.g. Philippines). A seamless delivery mechanism resulting in customer satisfaction has been valued by many customers.
In addition, “fulfillment centers/warehouses” are located typically near airports, with employees unpacking/inspecting goods incoming, storing, picking, and shipping; central computing allows “shopping cart” picking of items by employees or outsourced (which may be automated in future with Kiva Systems’ automated warehousing option acquisition).
Good carried/services offered by Amazon can be classified into “retail” such as media, groceries, personal care, and other products; groceries were facilitated by division Vine.com. Global expansion, e.g. to India, has been met with rivalry (e.g. Flipkart).
However, despite all considered, Amazon’s very successful first-mover effect appears to be obvious, with 63% of all books sold online and 40% of ALL BOOKS sold at all being via Amazon (!) in 2014.
In terms of electronics, television set-top boxes have added to the latest Kindle and tablet (Kindle Fire) based on Android operating system; TV streaming via Netflix, Hulu, and proprietary streaming service; in addition, MP3 songs via various companies (EMI, Universal, Warner Bros., Sony) were offered.
Its further excursions into the business world include art marketplace, and services such as “Prime” which include incentives and access to certain videos and songs for free, as well as storage for photos, etc.
In addition, offering web services such as AWS allowed cloud storage, access to certain programs. Other unique programs include film production, philanthropic facilitation and political contributions, wireless access via ATT/Verizon/Sprint/T-Mobile, and a limited home grocery delivery service (in Seattle and Los Angeles, for non-perishable items). Also, repair services are being provided.
Controversies, as cited by sources Salon.com and others, include alleged poor working conditions (e.g. walking over 10 miles picking packages, in hot conditions at times, picking every 30 seconds, with 3% not being fired) and extreme competitive practices as well as accessibility not carefully enough monitored to minors (per FTC investigation allegation). Amazon reportedly defends practices as being “customer-centric,” to help provide best for the customer, a practice which Salon.com cites as being similar to that of Walmart. Approximately $2mm/year are reportedly spent on lobbying the U.S. government.
The Worldwide Amazon of the Future
Drone delivery of Amazon products (via Amazon Prime Air) is being contemplated for packages less than 5 pounds and less than 30 minutes away (10-20K distance from fulfillment centers), with approval from FAA potentially needed. E-commerce, which has been implemented already to assist businesses (while using Amazon platform for a commission of 1-2%), as well as furthering the credit card reader platform are continuing projects.
Among its 65mm visitors per month, customer reviews play a large part and are rewarded; third-party affiliates are incentivized to place Amazon.com links on their websites.
Also, its use of “Amazon Seller Rank” identifies its bestsellers already, but may have future implications of third-parties utilizing this in manners similar to Google.
Future partnerships just begun with Twitter (#AmazonCart resulting in an item being added to Amazon cart via Twitter), CRM management, and large companies using Amazon.com as a platform for their own sales.
With all the noted about Amazon, it remains a leading company by many sources’ “top lists,” and while facilitating a great deal for customers, continues to expand as a market leader with few legitimate competitors.
Via a strategy of initial intellectual property, application to “conventional books” and using one-click and other innovations in e-commerce, Amazon has utilized novel ideas with older concepts such as acquisitions, to grow into the leader of ecommerce today.
(Portions of this text are from sources of the internet, which may include Salon.com, Wikipedia.com, and Amazon.com)