Amazon Business Model

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Amazon is the world 's largest online retailer. The company offers a wide range of products and services through its websites which sell more than 40 categories of goods such as books, electronics, jewelry, and fashion clothes. The products include merchandise and products the company purchases for resale from other manufactures and other third-party sellers. Throughout a variety of categories, Amazon not only sell its own products and other third party products, it also manufactures electronic devices such as televisions, tablets, e-book readers and phones. The company is also an eCommerce and Internet technology platform where people are able to buy and sell their products and take orders by going through the company’s websites and the seller’s …show more content…
The first one is online retailing. Amazon has the world’s largest selection of goods for customers to choose from. They sell those products with the lowest price and make the smallest profit (Noren 2013). Their main goal is to satisfy the customer. The company is known to be an online bookstore at the very beginning. As time passes, Amazon started to sell pre-owned products on their websites because of the rising star, eBay. Unlike Amazon, eBay doesn’t have to have their product stocked in their inventory because the business is operated directly from customer to customer which means the seller is responsible for shipping the product to the buyer’s address. eBay is currently the biggest competitor of Amazon. The second business model is Internet service. Unlike other internet services, Amazon’s internet service is directly related to its retail business and the Kindle ecosystem which is the third business model of the company. In order to provide the best service to customers, Amazon has come up with a service called “Amazon Prime” which allows buyers to get the product within one or two business days. The company also has another internet service called Amazon Web Service which shows how the company has grown to be the number one in online retailing …show more content…
In order to understand the reason why Amazon has not been profitable since the initial public offering in 1997, it is really important to distinguish it from other unprofitable companies (Anders 2012). Amazon is not a business with no revenue nor small amount of revenue. People can simply go to its websites, find whatever good they wish to purchase and the price is right next to the product. If they wish to purchase the product, they can provide their credit card information and get charged or find another product. As the “Prophet of No Profit”, Bezos said “Amazon isn’t a charity; it’s a business—a business whose strategy is to make its customers as happy as possible” (Yglesias 2014). Even though the business is lacking profitability, however the investors are continuing have their money invested in the company. This is the reason why Amazon is different than any other business. It is because the business has their priority set to pleasure the customer and continue to expand the business, despite the lack of profit within the business. This is what makes the business great. In the long run, I believe Amazon will be able to balance innovation and expansion with profitability because of the high exponential growth of internet usage and the popularity of online

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