Amazon.Com

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‘Amazon.com’ founded in 1994 by Jeff Bezos as a pure
online book retailer



Vision is becoming the place for consumers to find and
discover anything they might want to buy online



This vision of ‘breadth and selection’ takes its roots from the name of The World’s Largest River



Amazon select the lead strategy so they conduct largescale innovative e-commerce activities

•The Retail Model
•The Market Place Model
•Integrating the Businesses
•Executing the Single-Store Vision
•The Apparel Opportunity



In July of 1995 opened for business as ‘Earth’s Biggest Bookstore’



In 1996 achieved $875.000 in sales , in 1997 $16 million



Daily site visits 80.000 with 340.000 unique customers



In 1997 went public, in 1998 stock price increased by 3700% from $1.5 to $53



Business to Consumer Transactions



Ordering its books on demand from large book distributors limits Working Capital and Warehousing Investments.



They didn’t take responsibility, used drop shipping technique



Problem: While they are avoiding investments on
warehousing, don’t they risk the delivery of products on time and

 Expanding Its Product Range


In June 1998 started to sell music



In Nov 1998 entered DVD/ Video Business



During last half of 1999 launched toys, electronics, tools,
software



During 2000 launched lawn and patio and kitchen products
as well as cell phones and wireless services



Expanded overseas to UK, Germany, Japan…

 Investing in Distribution


In preperation for Christmas 1999 season, invested its
warehouse and fulfillment capabilities



Increased distribution capability in product categories where it could not rely on third-party distributors

 Supporting the Business with Technology


Innovations in Customer Facing Technology




Tabs



Web site personalization and customization





One click buying

Stored customer info

Invest in its e-commerce infrastructure
 Payment processing systems,
 Customer Service Operations

 Entering the Auction Space


In early 1999, they realize potential power of auctions to
expand selecting of products available to customers.



Auction capability on Amazon.com in March 1999



Different from e-bay, guarenteeing buyers’ financial
protection, providing access to customer relations



Partnership with Sotheby for higher end arts and antique
auctions



Consumer to consumer transactions started

 Zshops


An area on web site that brings together customers and third party sellers



Introduced in the fall of 1999



Provided opportunity to operate within Amazon for small and
medium-sized merchants



Uploading, maintaining up to 40000 items with fixed price

 Merchant Relationships


Partnerships with other internet retailers (collaborative
commerce)
drugstore.com, living.com, wine.com, greenlight.com



Paid Amazon placement and referral fees for advertising



Purchasing equity in the partners



Referred as Amazon Commerce Network



Thousands of alliances formed



Also relationships with retailers that did not operate on
the web



Toys ‘R’ Us Example



Housing inventory, shipping them to customers, process
payments, perform post sale service



Toys tab in the Amazon.com



Toys ‘R’ Us retained responsibility for buying and pricing inventory

 Evolving Commerce Models


Get things done with partnerships, otherwise you cannot do



Traditional Retailers vs. Web-based businesses



Amazon’s certain skills and customer base on the table



Help customer to find and discover products with web
interface
Acquisition phase in customer service life cycle



Value of Amazon brand and customer experiences

Integrating the Business
Integrating
 Initial role of third party sellers
• Being in...
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