amazon company background essay

Michigan Journal of Economics

The History of Amazon and its Rise to Success

Written by Colby Hopkins 

Ranking fifth in the world in terms of market cap with a staggering $1.045 trillion (CompaniesMarketCap, 2023), Amazon has been able to cement itself as a global giant that has altered how we shop and live. Expanding beyond just delivering goods, it is also a media streaming service and manufactures other technologies such as “Alexa”. Amazon has quickly become one of the most recognizable company names throughout the world. It has achieved such success that it has become commonly used as a verb in everyday language, much like “Google.” However, like many other large corporations today such as Google and Facebook, Amazon started out as a small business building its way up to being a large corporation. Within this article, we’ll explore Amazon’s company history and its rags-to-riches story.  

The Beginning of Amazon

On July 5, 1994, Amazon was officially founded under the name “Cadabra” (as in abracadabra) by young Princeton graduate Jeff Bezos within a garage space in his rental home in Bellevue, Washington. However, after just a few months, Bezos switched the name to Amazon Inc because of Cadabra’s unappealing similarity to the word “cadaver” (A&E Television Networks, 2015). Roughly a year later, the Amazon website was officially published as an online bookseller delivering to all 50 US states and 45 countries from that same garage space.

Like many other companies in their first couple of years of production, Amazon saw losses. However, one of the most significant signs that the company was on the path to success came in the transition of quarter three (July 1 st – September 30 th ) to quarter four (October 1 st – December 31 st ) in 1996. Within that time span, Amazon’s revenues rose from $4.2 million to $8.5 million while seeing a $100,000 decrease in losses from each quarter (Wilhelm, 2019). Although they were still seeing roughly $2.2 million in total losses during this quarter, this was a positive sign as they were able to more than double their revenue while decreasing those losses.

After extending beyond books in 1998, the first time Amazon was able to cross into black numbers territory and make a profit was seen in the last quarter of 2001 after a busy Christmas shopping season (ABC News, n.d). From there, 2003 became Amazon’s first profitable year, as the company saw net profits grow from $3 million in the last quarter of 2002 to $73 million in the last quarter of 2003 (Hansell, 2004). This led to them earning $35 million for all of 2003, which was up from losing $149 million in the previous year. Overall, Amazon’s journey from a small online bookseller to one of the global giants today saw its ups and downs in the beginning, but their commitment to innovation led them to be one of the most successful companies in the world today.  

The Launch of Amazon Prime

         One of Amazon’s most recognizable and profitable services was first introduced in February 2005 known as “Amazon Prime”. Debuting as an unlimited two-day delivery subscription at $79 a year, Amazon Prime started with relatively limited consumer attraction due to the concept of online shopping being somewhat new and subscription prices still being too expensive to some. However, after a couple of years of expansion of the service and subtle changes such as the introduction of the Prime Video portion of the subscription, Amazon started to see substantial growth with their subscription service in the 2010s.

         According to data provided by Search Logistics, Amazon has seen an increase of roughly $29 billion in net sales from 2013 to 2021, with 2021 seeing a total of $31.77 billion in net sales of Amazon Prime. Additionally, “Amazon subscription value has more than doubled since 2017” (Search Logistics, 2022). This was in large part due to an increase of approximately 28 million subscribers from the years 2019-2021, as COVID-19 was at its worst. Based on the current trajectory of the previous years, Search Logistics also predicts that there will be an estimated total of 168.3 million subscribers by the year 2025.   

         Not only have the sales of the subscription helped increase profits, but the amount of purchases being made by those prime members has also helped contribute to Amazon’s success. Based on the speed of the operation and the convenience of free delivery, Amazon has been able to generate a lot more per year from Prime members’ purchases in comparison to non-prime members. Based on a 2021 survey, a Prime member’s average spending rate was $1,400 per year through Amazon, while non-members only spent roughly $600 yearly (Chang, 2021).  The implementation of Prime as a subscription service didn’t have the immediate impacts that Bezos and the rest of the Amazon employees desired; however, through more recent expansion tactics as well as the idea of online shopping becoming more of the norm, Amazon Prime has been a huge success and has played an essential role in the expansion of the company.

The Future of Amazon 

With all the success that Amazon has already achieved and their desire to continuously expand into different industries, the only question left is: What’s next for Amazon? Being most known for their delivery services, the most notable expansion Amazon is trying to accomplish is to facilitate their delivery process. While Amazon already offers a relatively short delivery time, depending on one’s location, they’re continuously trying to improve delivery time as technology advances over time. This includes their newest expansion of a trial delivery system with drones in Lockeford, California: Amazon Prime Air. Within this experimental program, air drones will be able to deliver to local communities within a small radius of the Amazon facility within just a couple of hours (Amazon Staff, 2022). In addition to this newly innovative project, Amazon has also looked into a fully electric and autonomous delivery system known as Amazon Scout (Patrao, 2022). Whether either of these programs will be the “next big thing” still remains unclear; however, it’s evident that Amazon will continue experimenting with different technologies in order to facilitate their delivery systems. 

In addition to expanding their delivery systems, Amazon is also pursuing expansion opportunities by forming partnerships and acquiring other companies. Although Amazon has developed different partnerships with several different renowned companies such as Kohl’s and Best Buy, a new partnership with Grubhub could lead to their domination of another delivery service: food and groceries. Although this new partnership still hasn’t provided definite growth for both companies just yet, with them being two of the largest companies in their own respective industries, the partnership between Amazon and Grubhub has the potential to alter the entire food and grocery delivery industry. While Amazon’s partnership with Grubhub was big news for the company, Amazon has also been actively expanding through acquisitions as well. For example, the famous media making company, MGM (Metro-Goldwyn-Mayer) studios was recently bought out by Amazon for $8.5 billion, which is known for the “Rocky” films, “Rain Man”, and more (Maas, 2022). With its recent acquisition of MGM, Amazon plans to produce TV and movie projects based on popular MGM franchises, including “Legally Blonde” and “Robocop” (PYMNTS, 2023). Although no one knows what lies ahead in the future, it’s clear that Amazon wants to continue to grow as a corporation through their experimentation in a more advanced delivery system and strategic business partnerships and acquisitions.

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https://variety.com/2022/tv/news/amazon-mgm-merger-close-1235207852/.

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‘Robocop’.” Amazon Eyes TV, Movie Projects for MGM Titles | PYMNTS.com , 

PYMNTS.com, 16 Apr. 2023, https://www.pymnts.com/amazon/2023/amazon-looking-to-turn-mgm-properties-into-movies-and-tv-series/.

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Amazon, 13 June 2022, https://www.aboutamazon.com/news/transportation/amazon-prime-air-prepares-for-drone-deliveries .

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Home » Business History » History and Background of Amazon

History and Background of Amazon

Considered a pioneer in online retailing, Amazon.com, Inc. expanded during the late 1990s to offer the “Earth’s Biggest Selection” of books, CDs, videos, DVDs, electronics, toys, tools, home furnishings and housewares, apparel, and kitchen gadgets. Through third-party agreements, Amazon.com also sells products from well-known retailers including Toysrus.com Inc., Target Corporation, Circuit City Stores Inc., the Borders Group, Waterstones, Expedia Inc., Hotwire, National Leisure Group Inc., and Virgin Wines. Sometimes criticized for its focus on market share over profits, Amazon.com put investor fears to rest when it secured its first net profit during the fourth quarter of 2001.

The Early 1990s: Beginnings

Throughout the 1990s, the popularity of the Internet and World Wide Web swept across the world, and personal computers in most businesses and households got hooked up in some form or another to Internet providers and Web browser software. As use of the Internet became more prevalent in society, companies began looking to the Web as a new avenue for commerce. Selling products over the Internet offered a variety of choices and opportunities. One of the pioneers of e-commerce was Jeff Bezos, founder of Amazon.com.

In 1994, Bezos left his job as vice-president of the Wall Street firm D.E. Shaw, moved to Seattle, and began to work out a business plan for what would become Amazon.com. After reading a report that projected annual Web growth at 2,300 percent, Bezos drew up a list of 20 products that could be sold on the Internet. He narrowed the list to what he felt were the five most promising: compact discs, computer hardware, computer software, videos, and books. Bezos eventually decided that his venture would sell books over the Web, due to the large worldwide market for literature, the low price that could be offered for books, and the tremendous selection of titles that were available in print. He chose Seattle as the company headquarters due to its large high-tech work force and its proximity to a large book distribution center in Oregon. Bezos then worked to raise funds for the company while also working with software developers to build the company’s web site. The web site debuted in July 1995 and quickly became the number one book-related site on the Web.

In just four months of operation, Amazon.com became a very popular site on the Web, making high marks on several Internet rankings. It generated recognition as the sixth best site on Point Communications’ “top ten” list, and was almost immediately placed on Yahoo’s “what’s cool list” and Netscape’s “what’s new list.” The site opened with a searchable database of over one million titles. Customers could enter search information, prompting the system to sift through the company database and find the desired titles. The program then displayed information about the selection on a customer’s computer screen, and gave the customer the option to order the books with a credit card and have the books shipped in a just a few days.

Unlike its large competitors, such as Barnes & Noble and Borders, Amazon.com carried only about 2,000 titles in stock in its Seattle warehouse. Most orders through Amazon.com were placed directly through wholesalers and publishers, so no warehouse was needed. Amazon.com would simply receive the books from the other sources, then ship them to the customer. At first, the company operated out of Bezos’ garage, until it was clear that it was going to be a success, necessitating a move to a Seattle office, which served as the customer support, shipping, and receiving area. It was interesting that, because of the Internet, such a small venture could realize such a broad scope so quickly; within a month of launching the web site, Bezos and Amazon.com had filled orders from all 50 states and 45 other countries.

As a pioneer in the world of Internet commerce, Amazon.com strived to set the standard for web businesses. With that goal in mind, Bezos went to work on making the web site as customer friendly as possible and relating the site to all types of customers. For those people who knew what book they were looking for and just wanted quick performance and low cost, Amazon.com offered powerful search capabilities of its expanded 1.5 million-title database. The company also began offering 10 to 30 percent discounts on most titles, making the prices extremely affordable. For other customers who were just looking for something to read in a general area of interest, Amazon.com offered topic areas to browse, as well as lists of bestsellers, award winners, and titles that were recently featured in the media. Finally, for people who could not decide, Amazon.com offered a recommendation center. There a customer could find books based on his or her mood, reading habits, or preferences. The recommendation center also offered titles based on records of books the customer had purchased in the past, if they were return customers to the site.

Other hits with customers were the little touches, such as optional gift wrapping of packages, and the “eye” notification service, which sent customers e-mails alerting them when a new book in their favorite subject or by their favorite author came into stock. The site also offered the ability for customers not only to write their comments about different books and have them published on the site, but to read other customers’ comments about books they were interested in buying.

Going Public in 1997

After less than two years of operation, Amazon.com became a public company in May 1997 with an initial public offering (IPO) of three million shares of common stock. With the proceeds from the IPO, Bezos went to work on improving the already productive web site and on bettering the company’s distribution capabilities.

To help broaden the company’s distribution capabilities, and to ease the strain on the existing distribution center that came from such a high volume of orders, in September 1997 Bezos announced that Amazon.com would be opening an East Coast distribution center in New Castle, Delaware. There was also a 70 percent expansion of the company’s Seattle center. The improvements increased the company’s stocking and shipping capabilities and reduced the time it took to fill customers’ orders. The Delaware site not only got Amazon.com closer to East Coast customers, but also to East Coast publishers, which decreased Amazon.com’s receiving time. With the new centers in place, Bezos set a goal for the company of 95 percent same-day shipping of in-stock orders, getting orders to the customers much faster than before.

Another growth area for Amazon.com was the success of its “Associate’ program. Established in July 1996, the program allowed individuals with their own web sites to choose books of interest and place ads for them on their own sites, allowing visitors to purchase those books. The customer was linked to Amazon.com, which took care of all the orders. Associates were sent reports on their sales and made a 3 to 8 percent commission from books sold on their sites. The Associates program really began to take off in mid-1997, when Amazon.com formed partnerships with Yahoo, Inc. and America Online, Inc. Both companies agreed to give Amazon.com broad promotional capabilities on their sites, two of the most visited sites on the Web. As the success continued, Amazon also struck deals with many other popular sites, including Netscape, GeoCities, Excite, and AltaVista.

As the company continued to grow in 1997, Bezos announced in October that Amazon.com would be the first Internet retailer to reach the milestone of one million customers. With customers in all 50 states and now 160 countries worldwide, what had started in a Seattle garage was now a company with $147.8 million in yearly sales.

Further Expansion in 1998

As Amazon.com ventured into 1998, the company continued to grow. By February, the Associates program had reached 30,000 members, who now earned up to 15 percent for recommending and selling books from their web sites. Four months later, the number of Associates had doubled to 60,000.

The company’s customer database continued to grow as well, with cumulative customer accounts reaching 2.26 million in March, an increase of 50 percent in just three months, and of 564 percent over the previous year. In other words, it took Amazon.com 27 months to serve its first million customers and only six months to serve the second million. This feat made Amazon.com the third largest bookseller in the United States.

Financed by a $75 million credit facility secured in late 1997, Amazon.com continued to reshape its services in 1998. To its catalog of over 2.5 million titles, the company added Amazon.com Advantage, a program to help the sales of independent authors and publishers, and Amazon.com Kids, a service providing over 100,000 titles for younger children and teenagers.

Amazon.com also expanded its business through a trio of acquisitions in early 1998. Two of the companies were acquired to further expand Amazon.com’s business into Europe. Bookpages, one of the largest online booksellers in the United Kingdom, gave Amazon.com access to the U.K. market. Telebook, the largest online bookseller in Germany, added its German titles to the mix. Both companies not only gave Amazon .com access to new customers in Europe, but it also gave existing Amazon.com customers access to more books from around the world. The Internet Movie Database (IMD), the third acquisition, was used to support plans for its move into online video sales. The tremendous resources and information of the IMD served as a valuable asset in the construction of a customer-friendly and informative web site for video sales.

Another big change in 1998 was the announcement of the company’s decision to enter into the online music business. Bezos again wanted to make the site as useful as possible for his customers, so he appealed to them for help. Several months before officially opening its music site, Amazon.com asked its bookstore customers and members of the music profession to help design the new web site.

The music store opened in June 1998, with over 125,000 music titles available. The new site, which began operations at the same time that Amazon.com debuted a redesigned book site, offered many of the same helpful services available at the company’s book site. The database was searchable by artist, song title, or label, and customers were able to listen to more than 225,000 sound clips before making their selection.

Amazon.com ended the second quarter of 1998 as strong as ever. Cumulative customer accounts broke the three million mark, and as sales figures for Amazon.com continued to rise, and more products and titles were added, the future looked bright for this pioneer in the Internet commerce marketplace. With music as a part of the company mix, and video sales on the horizon, Bezos seemed to have accomplished his goal of gathering a strong market share in the online sales arena. As Bezos told Fortune magazine in December 1996: “By the year 2000, there could be two or three big online bookstores. We need to be one of them.”

Growth Continues: 1999 and Beyond

As such, the company’s focus on growth continued. In 1999, it launched an online auction service entitled Amazon Auctions. It also began offering toys and electronics and then divided its product offerings into individual stores on its site to make it easier for customers to shop for certain items. During the holiday season that year, the firm ordered 181 acres of holiday wrapping paper and 2,494 miles of red ribbon, a sign that Bezos expected holiday shoppers to flock to his site as they had in the two past years. Sure enough, sales climbed to $1.6 billion proving that the founder’s efforts to create an online powerhouse had indeed paid off. In 1999, Bezos reached the upper echelon of the corporate world when Time magazine honored him with its prestigious “Person of the Year” award.

While Amazon.com’s growth story was remarkable, Bezos’ focus on market share over profits had made Wall Street uneasy and left analysts speculating whether the company would ever be able to turn a profit. Sales continued to grow as the company added new products to its site–including lawn and patio furniture and kitchen wares. The company however, continued to post net losses. To top it off, the “dot-com boom” of the late 1990s came to a crashing halt in the early years of the new millenium as many startups declared bankruptcy amid intense competition and weakening economies.

Bezos remained optimistic, even as Amazon.com’s share price faltered. During 2001, the company focused on cutting costs. It laid off 1,300 employees and closed a distribution facility. The company also added price reduction to its business strategy, which had traditionally been centered on vast selection and convenience. Amazon.com inked lucrative third-party deals with such well-known retailers as Target Corporation and America Online, Inc. By now, products from Toysrus.com Inc., Circuit City Stores Inc., the Borders Group, and a host of other retailers were available on the Amazon.com site.

Amazon.com’s strategy worked. In 2001, sales grew to $3.12 billion, an increase of 13 percent over the previous year. During the fourth quarter, Amazon.com reached a milestone that many had regarded as unlikely; it secured a net profit of $5 million. In 2002, the company launched its apparel store, which included clothing from retailers The Gap and Lands’ End. Overall, the company reported a net loss of $149 million for the year, an improvement from the $567 million loss reported in 2001. In the fourth quarter of 2002 however, the firm secured a quarterly net profit of $3 million–the second net profit in its history.

While securing quarterly net profits was a major turning point for the young company, a July 2002 Business Week article warned, “after seven years and more than $1 billion in losses, Amazon is still a work in process.” Indeed, the company’s foray into providing the “Earth’s Biggest Selection” had yet to prove it could provide profits on a long-term basis. Nevertheless, Bezos and his Amazon team remained confident that the firm was on the right track. With $3.9 billion in annual sales, Amazon.com had without a doubt come a long way from its start as an online book seller.

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History of Amazon: From Garage Startup to The Largest E-Commerce Marketplace

How much do you know about the history of Amazon?

Amazon is one of the biggest e-commerce marketplaces in the world. Today, Amazon is also the platform where new entrepreneurs can make millions selling products online .

Often touted as "The Everything Store," you can buy nearly anything you can think of on Amazon—from novelty coffee mugs to high-spec laptops. This vast product selection, paired with a customer-centric business model, explains why Amazon represented 49% of the U.S. e-commerce market in 2018 .

Amazon wasn't always the retail monolith you know today. In this article, we offer a brief history of Amazon. You'll find out all about the milestones that propelled this garage startup to e-commerce royalty. Plus, feast your eyes on the epic “Everything You Need to Know about Amazon” infographic below.

But first, if you’re really here because you want to build a physical products brand that sells on Amazon, watch this video.

The History of Amazon (Including Little Known Facts That May Surprise You)

How did amazon begin.

The protagonist of this story features Jeff Bezos . After graduating from Princeton University in computer science and electrical engineering, Bezos worked several jobs, including a telecommunications startup and a banking firm.

In 1994, Bezos landed at the hedge fund D.E. Shaw. He quickly climbed the ladder, becoming Vice President in just four years. Here, Bezos was responsible for researching new business opportunities on the budding internet at the time. But when Bezos proposed a list of 20 products they could sell online, they shut him down. This is when Bezos finally decided it was time to set out on his own.

"I knew that I might sincerely regret not having participated in this thing called the internet that I thought was going to be a revolutionizing event. When I thought about it that way... it was incredibly easy to make the decision." – Jeff Bezos

When Was Amazon First Started?

The stage is set. So, when does the history of Amazon begin?

Amazon didn't start as the prominent household name you know today. Originally called Cadabra Inc., Bezos wanted to play off the magical incantation abracadabra. This decision quickly fell through after his lawyer said "Cadabra" sounded like "cadaver" on the phone. Good move— that's not the most flattering association when you're building a brand.

After poring over the dictionary, Bezos mulled over two options: Relentless and Amazon. But you already know which name won this competition. (Fun fact: if you type Relentless.com into your browser, you get redirected to Amazon.com.)

Amazon was the perfect choice. What better way to name the (soon to be) world's most prolific e-commerce marketplaces than after one of the world's largest rivers? Bezos registered Amazon.com on November 1, 1994.

What Was Amazon's Original Purpose?

Name picked. Check. Domain name registered. Check. 

Now, what to sell?

Remember that list of 20 products Bezos proposed to his former boss? After boiling down this list, he decided that he would kickstart Amazon by selling books. Why?

• There's a universal demand for books.
• Books aren't super expensive.
• There were thousands of titles he could sell.

But what about the competition?

How did Bezos intend to succeed when facing well-known competitors , like Barnes & Noble?

Convenience. 

Bezos wanted books to be accessible to every reader, no matter where they lived. He wanted Amazon to be the go-to resource for people everywhere to purchase books.

So, in July 1995, Amazon opened its doors as one of the first online bookstores. But if you think Amazon had the 1,000,000 square feet fulfillment centers they have today, think again. The beginnings of the Amazon company history and background might surprise you.

Fulfilled by Amazon… In a Garage?

That's right. Jeff Bezos started running Amazon.com straight from his garage in Seattle. Even with humble beginnings, the history of Amazon was off to a roaring start, generating far beyond any ole' garage sale:

• Within 30 days, Amazon generated $20,000 per week in sales.
• In just a few months, Amazon had customers in every U.S. state plus 45 countries.
• By the end of the year, Bezos employed 250 employees.

Yet, Amazon was snowballing—Bezos needed additional capital to meet increased demand. In 1997, Bezos decided to release Amazon's IPO at just $18.00 per share. If you managed to snag some shares, you're potentially sitting on a stack of cash. "$10,000 invested on that day and price would be worth more than $12 million as of May 2020," according to Investopedia .

Amazon raised $54 million. The funding went to growing Amazon.com as the leading online retailer of books of its time.

Transitioning into The Everything Store

The Amazon you know today is more than the leading online bookstore. It's the leading online retailer for… well, anything! Hop on their website today, and you can buy pet accessories, clothes, and trampolines. After absorbing Whole Foods markets, you can even order groceries online.

So, when did Amazon start selling more than books?

It was a slow transition. In 1998, Amazon announced that they'd be expanding to sell more than books. They started selling computer games and music. Within a few years, Amazon's product categories grew to encompass computer software, toys, and video games.

Amazon's rapid growth didn't go unnoticed. TIME Magazine featured Jeff Bezos as the Person of the Year 2019. Jeff Bezos' face on the cover of Time Magazine launched him into the public discourse. That only created more publicity for Amazon.com.

Amazon Didn't Just Expand Their Product Categories

Amazon did more than just selling more product categories. Bezos also started acquiring and starting subsidiary companies.

After achieving massive profitability in a couple of years, Bezos invested heavily in computers and servers to run its business operations. Eventually, Bezos realized a winning idea. They'd use their computer systems to help other companies run their businesses.

The year is 2006. Enter: Amazon Web Services (AWS).

AWS is a cloud computing company that hosts websites for customers and businesses. If you're an entrepreneur with a winning business idea, you need an online home. You need to host your site on a server.

AWS lets you rent servers, based on your unique business needs. It's an affordable way for small business owners to run large-scale websites. AWS is also for more than small business owners. Noteworthy companies you're likely familiar with also use AWS:

Yet, AWS is only one point in Amazon's extensive web of subsidiaries. You might be familiar with other Amazon subsidiaries. The shortlist includes IMDb, Audible, Zappos.com, Twitch, and Whole Foods Market.

The history of Amazon doesn't end with just selling everything. Pull back the curtains, and it feels like Amazon is everywhere.

When Did Amazon Become Popular?

Amazon had three milestones that significantly contributed to its reputation and success:

#1 The 1-Click Patent

When shopping around Amazon, you've probably seen this button before:

This button is the likely culprit responsible for all those impulse purchases you've made. Yes, we all have that wacky coffee mug nobody needs. 

In September 1999, Bezos patented this technology to purchase an item in one-click. This patent may not seem like much. But this patent is a game-changer for the online shopping experience.

See, increasing your customer conversion rates means reducing friction during the shopping experience. This simple button reduces that friction. Essentially, it eliminates those pesky seconds when a shopper reconsiders the contents of their cart. 

Other companies noticed and tried to (illegally) implement this technology for their own business. Barnes & Noble was one of those companies. They quickly met with a lawsuit for patent infringement .

Fortunately for companies today, the patent expired in 2017. That means any business could leverage this 1-click buy button to boost their online sales potential.

#2 The Birth of Amazon Prime

On February 2, 2005, Amazon debuted its customer loyalty program. You already know what it is. It needs no introduction.

Amazon Prime.

For $79 per year (at the time), this membership got you 2-day shipping on any order. That was monumental at the time (and perhaps still is). This new promise forever raised the bar for convenience when online shopping. And it's the one thing about Amazon that distinguishes itself from its competitors.

But many stakeholders were hesitant about this business decision. They feared this membership program would bankrupt the company. This huge promise would surely drain the company's coffers, many worried.

But Bezos proved the naysayers wrong.

Instead, Amazon Prime created a fiercely loyal customer base. Prime members were more likely than non-Prime members to spend more and place more frequent orders. According to Business Insider, Amazon's Prime membership base has steadily grown. Currently, 150 million Amazon members globally enjoy its perks.

The Amazon Prime membership is one reason Amazon rules the e-commerce marketplace today.

#3 Amazon Revisits Its Bookstore Roots

In 2007, Amazon achieved another milestone: the unveiling of its first Kindle e-reader.

It's little surprise why Bezos chose to capitalize on their e-reading devices. After all, Amazon built a reputation for being the leading online retailer of books. Now, Amazon is the leading online retailer of electronic books.

The Kindle e-reader created an entirely new reading experience for their customers. In 2011, e-books were even outselling print books on Amazon, according to The New York Times . These low-cost devices would not only get more people reading. They also got more people buying from Amazon. 

Amazon's Recent and Some Less-Than Stellar Press

Amazon has achieved some incredible successes — including helping entrepreneurs make a million dollars on Amazon. But this company also has its fair share of undesirable press. Stick around to find out.

Bezos Stealing Proprietary Information?

Bezos has been the target of allegedly stealing proprietary information after investing in startups.

"The Journal spoke with startups who said Amazon made similar hardware and software products after purchasing stakes in the companies," Business Insider reports . "In one example, Amazon invested in a hardware startup Nucleus, only to unveil an Echo device that directly competed with Nucleus' product."

Smaller companies, like Defined Crowd and Vocal Life, were also alleged victims of stolen proprietary information. These smaller companies could not compete with the Amazon giants. Like Nucleus, these businesses had to downsize or close.

Responding to these allegations, Amazon says they do not use confidential information to create competing products. "Unfortunately, there will always be self-interested parties who complain rather than build," an Amazon spokesperson told Business Insider. "Any legitimate disputes about intellectual property ownership are rightly resolved in the courts." 

Amazon stands by its track record in creating features, products, and services that innovate that market and serve its customers.

Amazon and COVID-19

As you already know, COVID-19 disrupted the economy and daily lives of all Americans. Unfortunately, it has also created working conditions that have stirred the American workforce into action.

Workers across the country organized a boycott of prominent corporations. They had Amazon, Whole Foods, Instacart, and Target in their sights on May 1, 2020. Many called this The Mayday General Strike. 

"Workers at Amazon, Whole Foods, Instacart, Walmart, FedEx, Target, and Shipt say they will walk off the job on May 1," Vice Motherboard reports , "to protest their employers' failure to provide basic protections for frontline workers who are risking and losing their lives at work."

To protect their health and safety while working, frontline workers demanded:

• Personal protective gear
• Healthcare benefits

This movement gained significant online traction. Workers from over 100 stores pledged their participation. Yet with this press, how is Amazon's bottom line faring?

Amazon Experiencing a "Wealth Surge" During Pandemic?

Despite the overall trend of the economy in 2020, Amazon still reported $75.5 billion in the first quarter. Fortunately, Bezos is putting this money to good use in these uncertain times.

"[Bezos] has announced that Amazon currently plans to spend all of its expected $4 billion operating profit for the second quarter of this year on measures to insulate the company against COVID-19," Dailystar UK reports . These insulating measures include:

• More cleaning in fulfillment centers
• Protective gear
• Changes to promote social distancing
• Higher wages
• Regular coronavirus testing for employees

Moreover, Amazon has hired 175,000 additional workers within the last business quarter. Whether the recent May Day strikes have influenced this change, Bezos is using his company's profits to contribute to his employee's health and safety.

Other Questions People Ask Once They Go Down The History of Amazon Rabbit Hole

Who is a trillionaire.

A trillionaire is somebody whose net worth is higher than one trillion dollars (or equivalent currency). With that said, how does a trillionaire measure against the richest man on earth?

Who Is The Richest Man On Earth?

Jeff Bezos is. The 2019 Bloomberg Billionaire index reports Jeff Bezos's net worth at approximately $190 billion. Following Bezos is Bill Gates , Founder of Microsoft, with a reported net worth of $104.3 billion. Next in line is Bernard Arnault , with his estimated net worth of $106 billion.

Is Anyone a Trillionaire?

As you just learned, we currently don't have any trillionaires in the world. Bezos is ranking first place with the highest net worth. However, many financial experts predict that Jeff Bezos is well on his way to the trillionaire milestone.

(Perhaps you might dare rise to the challenge and get there first!)

Why Did Jeff Bezos Create Amazon?

Simply put: Jeff Bezos had a passion for electronic retailing and servicing the customer. Throughout his life and college, Bezos dreamed of creating his own company. The internet created an opportunity, and he seized it.

More importantly, Bezos created Amazon because he followed the "regret minimization framework." This framework poses the question: In X number of years, will I regret not doing this? He asked this same question when deliberating leaving his day job to found a tech startup.

The Amazon history timeline follows Bezos from his garage startup in 1994 to the multi-billion dollar company he built today. Yes, the journey brought challenges Bezos had to overcome. Yet, it might be safe to say that Bezos holds no regrets.

What about you?

Do you have a winning business idea that you think could innovate the market and better serve your customers? If you're sitting on this idea, do what Bezos did. Ask yourself, In X number of years, will I regret not doing this? You know the answer already. The next step is getting your game plan together. Check out this free video training series . You'll be on your way, and we'll be here to help you every step of your journey.

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Amazon Success Story: How it Became the eCommerce Giant

Alvin Wiseman

• March 8, 2023

Table of Contents

A Brief About Amazon

Highlights of amazon, jeff bezos's early life.

The Beginnings of Amazon

Amazon's Key Acquisitions

Amazon Funding and Investment

Amazon's Main Competitors

What Made Amazon Successful?

A peek into amazon's future plan.

1. What makes Amazon unique?

2. what are the strategies used by amazon to achieve success, 3. what has been amazon's approach to entering new markets.

Some tactics that amazon uses to enter and dominate new markets are:

• Acting as a fuel for small businesses
• Implementing AI and advanced technology
• Expanding to emerging markets
• Making critical acquisitions

4. What are the key factors behind Amazon's success?

The key factors of Amazon’s success are:  

• Loyalty and pricing
• Supporting decisions
• Fast and convenient
• Platform-specific
• Content as a service
• Omni-channel
• Curation and specialty items

5. How has Amazon adapted its business model to remain competitive?

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Amazon at 25: The story of a giant

"There's no guarantee that Amazon.com can be a successful company. What we're trying to do is very complicated," said Jeff Bezos in 1999, just five years after launching the online firm.

That the firm's founder was so uncertain of its future seems surprising.

Today, 25 years on from when it started, Amazon is one of the most valuable public companies in the world, with Mr Bezos now the world's richest man, thanks to his invention.

What started as an online book retailer has become a global giant, with membership subscriptions, physical stores, groceries for sale, its own smart devices and a delivery system which can get things to customers in just an hour.

So how has the Amazon empire been built?

Amazon's innovation can be clearly seen in its financial results.

Last year, it became the world's second-ever public company to be valued at $1 trillion, after Apple, and it has the second-highest market valuation in the world, after Microsoft.

The huge success of the online giant is also evident in its revenue.

Sale are expected to hit a record-breaking $275.06bn by the end of this year, with forecasts suggesting revenues could pass $320bn by the end of 2020.

Mr Bezos's success has been driven by the firm's global expansion, but mainly by expanding into a wide variety of other sectors.

Video streaming services and devices, cloud services and most recently groceries (with the acquisition of Whole Foods Market) have allowed the company to compete directly with technology giants such as Facebook, Apple, Google and Netflix.

And it all began with selling books.

1995: Amazon launches with online book sales

"When we first started selling books four years ago, everybody said, 'Look, you're just computer guys and you don't know anything about selling books.' And that was true," said a young Jeff Bezos in 1999.

However, the huge stockpiling space that the company had at the time in the US helped Amazon become a leader in the sector and enabled them to offer a wider selection of books than its bricks-and-mortar rivals.

Then ebooks arrived and Amazon was smart enough to become a key player in that market too.

1999 - Amazon becomes the biggest online sales platform in the world

In the late 1990s, Amazon decided to start selling other goods, starting with music and DVDs.

Soon Mr Bezos's empire grew to include electronics, toys and kitchen utensils.

The growing network of US warehouses helped extend what the company could offer, dramatically increasing its popularity with customers.

Ten years later, Amazon had become the biggest online seller in the US and around the world.

2005 - Amazon launches Prime membership

Following the creation of Amazon Marketplace in 2000 - which opened the platform up to thousands of small businesses - Amazon felt the need to boost its delivery service for loyal customers.

Amazon Prime was launched in 2005, offering quicker shipping for selected items. This boosted sales of all sorts of goods.

More than 100 million paying customers are now members of subscription service Amazon Prime, which also offers video and music streaming.

It is the second-largest paid membership programme in the world.

2007- Amazon launches its first consumer product: The Kindle

Amazon never forgot its bookselling origins. When ebooks started to become popular, Mr Bezos launched the Kindle in 2007, eventually becoming the global leader in the sector.

The Amazon smart devices department grew exponentially, facing fierce competition from Apple and Google in the early 2010s.

Amazon, however, was the first company to launch a smart device: the Echo speaker, equipped with the firm's own artificial intelligence system, Alexa.

It is now the third-largest seller of smart devices in the US.

Today the future of Amazon looks a bit more complicated than just selling products on the internet.

The second half of 2018 was difficult for the company and its market valuation has fallen back below the $1tn mark.

Having successfully dominated online retail, the firm has now set its sights on expanding its services - and perhaps surprisingly, into physical stores - to create a new way of shopping.

What will Amazon be in another 25 years? We'll have to wait and see.

Amazon is now 25 years old

How jeff bezos took amazon to the top.

Amazon’s Business Model Essay

• To find inspiration for your paper and overcome writer’s block
• As a source of information (ensure proper referencing)
• As a template for you assignment

Introduction

Amazon.com encompasses a Fortune 500 multinational electronic commerce company situated in Seattle. It is identified as the world’s largest online retailer, established in 1994 and launched in 1995 by Jeff Bezos, under his regret minimization framework.

Its business is not only limited to America, but also spans United Kingdom, India, Germany, Canada, Spain, France, China and Japan (Amazon.com Inc 1). Though it is engaged in selling various products according to its diverse departments, it also ships the products that have been purchased from it to certain specified countries.

Initially, it was launched as an online bookstore, but later diversified into the sale of MP3 downloads, DVDs, CDs, video games, software, apparel, toys, furniture, food and electronics. Amazon’s issued its public offering of stock in 1997 at an $18.00 per share price under AMZN stock exchange symbol of NASDAQ.

In terms of its annual reports and Proxy Statements in 2011, it had a revenue of $ 48 billion, operation income of $862 million, net income of $631 million, total assets of $25.2 billion, total equity of $7.75 billion and 56,200 employees.

Benefits and limitations of the Amazon’s online Retail Model

As the most effective online retail model, Amazon.com utilizes the Affiliate Business Model. This model is utilized alongside the market mix of pricing, promotion, product and people, to enhance the company’s marketing capability.

The Affiliate Business model provides people customers with various purchasing prospects, regardless of the place they are surfing from. The Affiliate Business Model proffers many affiliated partner sites with various incentives.

These sites provide with the necessary points that link to the merchants while purchasing, with the aim of generating sales. Owing to the fact that it is a pay-for performance model, the non-generation of sales by the affiliates does not translate into costs for the merchant.

This online retail model is highly suited for the World Wide Web; hence, explaining its popularity. This popularity aids Amazon to generate a high volume of sales.

In terms of easy access, the website provides the customer with various categories of the products available that help the customer to easily search the product he or she needs from the department under which the product is listed.

The various departments of products displayed on the Amazon website ascertain that a variety of products are available to satisfy the diverse customer needs.

It reduces overhead expenses and ensures that the products are accessible to a larger demographic group. In terms of security and efficiency, payment is conducted in a discreet manner to ensure security and the products are delivered efficiently and within the deadline provided.

Limitations

In terms of shipping cost and shipping time, shipping the products does not only pose additional and expensive costs for the customer especially if the merchant is far from the customer, but it also inconveniences the customer because he or she cannot receive the product earlier than five days after the purchase.

Essentially, communication between the buyer and the merchant is difficult, as there are no communication options provided on the website. Inherently, due to the fact that the customer cannot physically view the product, a product of less quality can be delivered to him or her, culminating into mistrust and low customer satisfaction.

The manner in which Amazon.com changes the market for books

Initially, the company sold and shipped books to customers (Sampson 54). This was later advanced to the sale of digital e-books that could be downloaded or printed. This did not generate the required sales volumes culminating into the current introduction of Kindle, a portable e-book reader (The New York Times 1).

Kindle utilizes wireless connectivity to enhance downloading, shopping, browsing, and reading of magazines, newspapers, e-books, blogs and other types of digital media in various chosen countries.

Bezos asserted that in 2009. Electronic reader sales made up to 35% of the physical book sales. The popularity of this application has aided the company to change the market for books from sale and shipping of books, to e-reading and downloading of full books or pages from certain books at a fee.

How the Design of Amazon’s website facilitates user efforts to locate a particular product

A search button is situated at the top of the website to allow customers to either search a product from all the Amazon departments provided, or from a specific department. Essentially, on the left hand corner of the website, the departments and sub-departments are displayed to help the customer narrow down his or her search of the specific product they would like to purchase (Amazon.com Inc 1).

Additionally, each customer is accorded with a cart that can help in selecting the different number of products he or she is willing to purchase. The website’s middle part contains the Amazon’s most sold products to enable the customer have an idea of the products mostly preferred and purchased by other customers.

This might convince the customer to try such products. The website also utilizes collaborative filtering that recommends to the customer the other products that he or she would prefer given his or her choice of a certain product. All Amazon products have prices that enable customers to compare with such prices with the others offered in the market to facilitate high volumes of sales.

Collaborative filtering and how Amazon uses this technique to encourage sales

Collaborative filtering encompasses a common Web Technique utilized in generating personalized recommendation. This is done through filtering or making automatic predictions on a user’s interests through collaborating or the collection of tastes and preference information of other users (Ekstrand et al 4).

The main assumption utilized in the case of collaborative filtering is such that id a person B posses the same opinion as person C about an Issue X, then there is a high likelihood that Person B will take up Person C’s opinion on another issues Y as compared to him taking the Opinion Y of another random person.

The data collected on customer behaviors is utilized by Amazon to conduct collaborative filtering. In this way Amazon generates a list of personalized items a certain customer might be interested in depending on the purchases and interests of other customers that hold the same customer behaviors as his or hers. This encourages a higher volume of sales.

Selling used books alongside new versions as a reasonable business practice that does not undermine the market for new books.

Selling used books alongside new versions encompasses a reasonable business practice that does not undermine the market for new books, because it allows the economically weak customers to purchase needed books (Sampson 125).

Some people keep used books in places where they keep things that they will never use because they are not in need of them anymore. Allowing them to sell such books offers others with the opportunity to access needed books at a lower price.

Essentially, the money acquired from such sales can aid customers to purchase newer versions of the other books they needed, but could not afford. Additionally, some customers might be in need of various books, but they cannot afford to purchase all books due to the quoted prices of the newer versions.

According them with lower priced versions will enable them to purchase the newer versions of the books they are in dire need of and the used versions of the books they least need.

Works Cited

Amazon.com Inc. Amazon.com .1995. Web.

Ekstrand, Michael D, John Riedl, and Joseph Konstan. Collaborative Filtering Recommender Systems . Hanover, Mass: now Publishers, 2011. Print.

Sampson, Brent. Sell Your Book on Amazon: Top-secret Tips Guaranteed to Increase Sales for Print-on-Demand and Self-Publishing Writers . Denver: Outskirts Press, 2007. Print.

The New York Times. “Amazon.com Inc”. The New York Times 31 January 2012 late ed.: Al. Print.

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