Question:
Case Study on Amazon.Com
Founded by Jeff Bezos, Amazon.com started as the “world’s largest bookstore” in July
1995. A virtual bookstore that physically owned no books, Amazon.com promised to
revolutionize retailing. Although some may debate whether it accomplished that, Bezos
clearly blazed a trail of e-commerce innovations that many have studied and followed.
Amazon.com set out to create personalized storefronts for each customer by providing
more useful information and more choices than could be found in your typical
neighborhood bookstore. Readers can review books and evaluate them on a one- to five-
star rating scale, and browsers can rate the reviews for helpfulness. Amazon.com’s
personal recommendation service aggregates data on buying patterns to infer who might
like which book. The site offers peeks into books’ contents, index, and beginning pages
with a “search inside the
book” feature that also lets customers search the entire text of 120,000 books—about as
many titles as are in a Barnes & Noble bookstore. Amazon.com’s one-click shopping lets
buyers make purchases with one click. Over the years, Amazon.com has diversified its
product lines into DVDs, music CDs, computer software, video games, electronics,
apparel, furniture, food, toys, and more. In addition, it has established separate Web sites
in Canada, the United Kingdom, Germany, France, China, and Japan. Amazon.com
continued to expand its product offerings with the 2007 launch of Amazon Video On
Demand, allowing consumers to rent or purchase films and television shows on their
computers or televisions. Later that year, Amazon.com introduced Amazon MP3, which
competes directly with Apple’s iTunes and has participation from all the major music
labels. The company’s most successful recent product launch was the Amazon-branded
Kindle, an electronic book reader that can deliver hundreds of thousands of books,
magazines, blogs, and newspapers wirelessly in a matter of seconds. As thin as a
magazine and light as a paperback, the device was Amazon.com’s number one selling
product in 2009. To overcome the lag between purchase and delivery of product,
Amazon.com offers fast, inexpensive shipping. For a $79 annual fee, Amazon.com Prime
provides
unlimited free express shipping for most items. While free shipping and price cuts are
sometimes unpopular with investors, Bezos believes it builds customer satisfaction,
loyalty, and frequency of purchase orders. Amazon.com has established itself as an
electronic marketplace by enabling merchants of all kinds to sell items on the site. It
powers and operates retail Web sites for Target, the NBA, Timex, and Marks & Spencer.
Amazon.com derives about 40 percent of its sales from its million-plus affiliates called
“Associates,” independent sellers or businesses that receive commissions for referring
customers who then make a purchase at the Amazon.com site. Associates can refer
consumers to Amazon.com through a variety of ways, including direct links and banner
ads as well as Amazon Widgets, miniapplications that feature Amazon.com’s wide
selection of products. Amazon.com also launched an affiliate product called aStore,
which gives Associates the ability to create an Amazon-operated online store easily and
without any programming knowledge. Amazon.com then supports these merchants by
providing new tools for their Web site, offering access to Amazon.com’s catalog of
products, and handling all payments and payment security through its Web Services.
Case Study on Amazon.Com
Founded by Jeff Bezos, Amazon.com started as the “world’s largest bookstore” in July
1995. A virtual bookstore that physically owned no books, Amazon.com promised to
revolutionize retailing. Although some may debate whether it accomplished that, Bezos
clearly blazed a trail of e-commerce innovations that many have studied and followed.
Amazon.com set out to create personalized storefronts for each customer by providing
more useful information and more choices than could be found in your typical
neighborhood bookstore. Readers can review books and evaluate them on a one- to five-
star rating scale, and browsers can rate the reviews for helpfulness. Amazon.com’s
personal recommendation service aggregates data on buying patterns to infer who might
like which book. The site offers peeks into books’ contents, index, and beginning pages
with a “search inside the
book” feature that also lets customers search the entire text of 120,000 books—about as
many titles as are in a Barnes & Noble bookstore. Amazon.com’s one-click shopping lets
buyers make purchases with one click. Over the years, Amazon.com has diversified its
product lines into DVDs, music CDs, computer software, video games, electronics,
apparel, furniture, food, toys, and more. In addition, it has established separate Web sites
in Canada, the United Kingdom, Germany, France, China, and Japan. Amazon.com
continued to expand its product offerings with the 2007 launch of Amazon Video On
Demand, allowing consumers to rent or purchase films and television shows on their
computers or televisions. Later that year, Amazon.com introduced Amazon MP3, which
competes directly with Apple’s iTunes and has participation from all the major music
labels. The company’s most successful recent product launch was the Amazon-branded
Kindle, an electronic book reader that can deliver hundreds of thousands of books,
magazines, blogs, and newspapers wirelessly in a matter of seconds. As thin as a
magazine and light as a paperback, the device was Amazon.com’s number one selling
product in 2009. To overcome the lag between purchase and delivery of product,
Amazon.com offers fast, inexpensive shipping. For a $79 annual fee, Amazon.com Prime
provides
unlimited free express shipping for most items. While free shipping and price cuts are
sometimes unpopular with investors, Bezos believes it builds customer satisfaction,
loyalty, and frequency of purchase orders. Amazon.com has established itself as an
electronic marketplace by enabling merchants of all kinds to sell items on the site. It
powers and operates retail Web sites for Target, the NBA, Timex, and Marks & Spencer.
Amazon.com derives about 40 percent of its sales from its million-plus affiliates called
“Associates,” independent sellers or businesses that receive commissions for referring
customers who then make a purchase at the Amazon.com site. Associates can refer
consumers to Amazon.com through a variety of ways, including direct links and banner
ads as well as Amazon Widgets, miniapplications that feature Amazon.com’s wide
selection of products. Amazon.com also launched an affiliate product called aStore,
which gives Associates the ability to create an Amazon-operated online store easily and
without any programming knowledge. Amazon.com then supports these merchants by
providing new tools for their Web site, offering access to Amazon.com’s catalog of
products, and handling all payments and payment security through its Web Services.
