Amazon has become a phenomenal name over the last decade and we are getting to know that innovation and technology are the answer to human sustainability. Back  Amazon was founded on July 5, 1984, by Jeff Bezos, it started by being the largest online seller of books. With time, the business model of Amazon developed, and it grew into one of the most successful businesses that this world has ever seen.

Amazon has come a long way from selling books to being one of the largest e-commerce platforms in the world. The company has diversified its services to artificial intelligence, cloud computing, digital products, and many more. By the time this piece of information reaches you, Amazon might have generated a couple more millions of dollars in other sources of revenue. 

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What is Amazon?

Amazon Logo

In full disclosure, it is not the Amazon rainforest but the massive tech giant that has provided the globe with one of the greatest companies of all time. This was in 1994 when a Wall Street executive of a hedge fund understood the untapped capabilities of the internet. 

He wanted to create a platform that would sell everything on the internet. Jeff wanted to name the company ‘Cadabra’, but was well advised to find a better alternative, considering the former to sound that was not consumer friendly.

On deciding on the name to be Amazon, Jeff Bezos started to structure the business by selling books. It was a time when Jeff’s vision was questioned, but that noise was subdued when Amazon recorded 180,000 accounts within just a year. 

The questionable noise vanished when Amazon went public in 1997 with a bag of $ 54 million on the database of NASDAQ. That same year, Amazon had gathered about $ 148 million in the form of revenues along with about 1 million accounts

By just one year, the revenue of Amazon skyrocketed to $ 610 million and Amazon started to sell products like music, video games, electronic equipment, software, and many more. The most interesting fact about Amazon was the customer reviews and personalized recommendation system. 

Such a process allowed the company to create a community of visitors and customers. Amazon also opened its doors to small businesses to sell their products on the platform in 2000

Just after two years, Amazon Web Services, or AWS was created, when Jeff announced that Amazon was not just a seller, but also a technology and software services company. AWS brought data from the internet to several developers, where the Elastic Compute system of Cloud rents process power and the Simple Storage system provided data storage renting. 

In the year 2007, Kindle was launched  to  foster the ebook industry. Amazon launched its in-house publishing division, in around 2009, where individuals can publish their books digitally over the platform. Well! By now we can see that from simply selling books, Amazon began selling almost everything online through their platform

Technology and the effective business model of Amazon that comes with Amazon shopping, Amazon music, and many others, the company has been providing opportunities for buyers to access a huge variety of products at a very competitive price and the sellers can introduce their products to a large number of customers. Amazon is now one of the largest retailers on the earth. 

Who founded Amazon and what are the company goals? 

Amazon was founded on July 5, 1994, and is owned by Jeff Bezos. But in 2021, Jeff decided to renounce the position and choose Andy Jassy as his successor. Unlike Alphabet from Google and Facebook for Meta, Amazon is the official name of the holding company and includes services like Amazon Web Services, Amazon Music, Prime Video, and several others. 

Amazon focuses more on customers rather than the competition that comes with innovative discovery and continuous operational efficiency. The company aims to be the best employer in the world based on customer-focused growth. 

How does Amazon earn?

How does Amazon earn

There are multiple verticals of Amazon from where the company earns money. These include : 

  • Amazon Marketplace- This is the first revenue stream of Amazon and the company earns about 50% of its income from here. Amazon asks the seller to give the company a fee in order to sell the products on the Amazon platform. 
  • Amazon Prime- The company’s Prime services are a subscription-based model, where the users can stream music, and movies, the benefits of 2 days shipping time, and many more. 
Amazon Prime
  • Amazon Web Services- The AWS platform is an efficient IT structure service that is offered to companies and several institutions and groups. This domain is a very precise offering by Amazon and its mark on technology parallels modern society.
  • Amazon Kindle- With this service, users can download digital books, read it, browse and read magazines, newspapers, and many more. Kindle attracts a lot of traffic which is essential for any business to thrive. 
  • Amazon Patents- There are about 1,000 patents of Amazon and these are licensed by a lot of companies. 
  • Amazon Advertising- The company’s platform showcases sponsored ads along with several videos. The most interesting thing to notice here is that Amazon already has a lot of customers who see these ads.
Amazon Web Services

The Customer Structure of Amazon : 

Amazon’s customers are compartmentalized into three sections namely buyers, sellers, and also developers. Sellers sell their products on the platform of Amazon by giving a fee and giving access to millions of customers. The buyers are the keen minds who visit the platform to enjoy the multiple services offered by Amazon and buy stuff from the e-commerce platform. The developers collaborate with Amazon Web Services and make the system more advanced. 

What does Amazon offer its customers?

Amazon under the  direction of Jeff Bezos has always looked upon the value it has been providing its customers since its inception. The strategy is to provide a variety of products at a low and competitive price with early deliveries and the best support team.  . 

Apart from that, the customers are also satisfied with the seamless system of the company. An internet connection to your device gives you entry to the largest retailer in the world that also provides quick deliveries and impressive pricing of the product.

The company’s app Prime is a dominant provider of revenue that offers tons of streaming services. Amazon is an internet-driven enterprise and it invested tens of billions of dollars to equip the digital media department in 2019. 

Along with this, Amazon has impeccable customer service support, where customers can reach out to the company for any assistance related to any product or service through calls, emails, and online chat support.

The revenue streams of Amazon include multiple services in the same as Pay-Per-Use support, AWS, Advertising, Patents, and many others. The technological setup of Amazon is a major thing to get awed about. The server and the entire system need to be on point 24/7 so that sales and business keep running. 

Reports indicate that back in 2013, the Amazon server was inoperable for about 40 minutes.It eventually had a loss of $5 million in sales in that year.  . 

. The backbone of the company lies on skilled employees and the supply chain processes excluding the warehouses of the company that was owned back in 2013. 

 A range of key activities of Amazon include is the maintenance and development of the platform also taking down to the reason reason why  Amazon heavily invests in app development, information protection, logistics, marketing, and many other divisions. 

The partners of Amazon are majorly the sellers, who generate the most revenue for the company, they are commonly the affiliates who earn a small commission from steering the traffic to the platform. Also, there are content creators, and developers who work  effortlessly to further strengthen the system

Amazon’s cost structure comes with support in IT,  information security and maintenance, and marketing along with expenses that come with running physical offices, warehouses, delivery stations, and others. 

Although Amazon is successful and expanding there are competitors : 

  1. Online Stores are present on the internet and for small businesses or niche shops, they can be more relevant to customers than Amazon. 
  2. Walmart is another mega business that generates most of its income through physical stores. However, the company also has an online division that produces products for its visitors and customers. 
  1. Flipkart is an Indian e-commerce platform formed in 2007 and is currently owned by Walmart and is one of the l  primary competitors of Amazon.
  2. Otto is an online retailer from Europe that sells products in the categories of fashion, sports, electronics, and many more.
  3. eBay is a C2C business model that shifted to B2C and is also considered a competitor of Amazon.

Strength of Amazon : 

Amazon has established a reputable brand name since its formation. The company stands second in line to Apple when it comes to brand valuation. The website and the online platform also have products listed at a reasonable price, to which the customers can also experience stellar after-sales support. 

The return policy of products in Amazon is superb and this has been a contributing factor in creating customer appreciation. Amazon has about 2 billion products from third-party businesses and sellers. The company also collaborates with local supply chain groups and understands the demands of the local market.

Almost every company has challenges and Amazon also has several of them. The company has been reported to maintain strict performance demands from the employees, which might be overwhelming for a lot of skilled individuals. thousands of fake reviews have been identified and removed from the database.

What we think is that with time everything can be modified and made to run according to the current times. Amazon Prime Video has had competition from other services like Netflix, Apple TV, Hulu, and many others. But the company has been for decades and understands the market’s mindset. Time always tells us our progress and who would have a decade ago that groceries could be delivered to our doorsteps. 

Such innovation has only been possible because of advancements in technology. These methods are a relief for senior citizens who can have access to an entire market just at their fingertips. We just need to embrace change, appreciate what is around us, and impart that positive energy for the good of the community. Technologies will become greater and stronger and it is we humans who drive the benefits of it and direct that to the purpose of easing our lives and saving time.