Amazon.Com And Business Essay

3214 words - 13 pages

Mido

Abstract:

Amazon.com is an On-line retailer of, originally, books. The company was established as a micro enterprise in the US in 1994. Since then it has enjoyed rapid expansion in all aspects of its operations, including business turnover, and a spectacular rise in share value since public floatation in 1997. New on-line sites based in Germany and UK and a distribution centre in Amsterdam were established in 1998 to cater for European markets. On August 30, 2000 Amzon.com launched its third site outside the US, Amazon.fr in France. Amazon.com sells only on-line and is essentially an information broker. It holds a relatively small, though increasing, inventory and outsources most aspects of its operations (but not IT). The key to its operation is to offer value added and sophisticated customised services, a continuously expanding catalogue of products in terms of both quantity and range, and deep discounts. Alliances and partnerships with publishers, other on-line retailers and technology providers are therefore strategic. The ambition of the company today is to become a premier general on-line retailer by leveraging on its existing brand and business model. Amazon.com: Business Overview

History

When founder and CEO Jeff Bezos studied retailing opportunities on the Internet, he decided on books because there was a broad field of book publishers but too many titles to be carried by a single store. Everyone reads books but has different preferences about what s/he wants to read. Although Jeff Bezos had no previous experience in the book trade, he saw a business opportunity in selling books solely on the Web. He started the company out of his garage in a Seattle suburb, wrapping orders and then delivering them to the post office in the family car. The characteristics of the books retailing industry make it amenable to electronic commerce: a great variety of products and consumer tastes, and tastes which hanker after a lot of information about the products. Moreover, there is room for bringing down margins, i.e. offering customers deep discounts.

Jeff Bezos picked the name Amazon because it is the biggest river on earth. He wanted his on-line bookstore to become "Earth's Biggest Bookstore", but without the need to stock vast quantities of books. Amazon.com would be lean, fit but hungry.

A screenshot of Amazon.com's very first homepage

Amazon.com opened its virtual doors in July 1995 with 1.1 million titles, almost ten times the number of books carried by an average bookstore. Amazon quickly became the largest online seller of books and has since parlayed that lead and leveraged its large customer base (17 million and growing) to rapidly expand into additional retail categories. Today, Amzon.com is considered the largest and most aggressive pure-play consumer e-commerce company, offering its customer an estimated 18 million unique products : books, music, videos, toys, electronics, software, home improvement...

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