Amazon.com and Business Essay

3168 Words 13 Pages
Mido Abstract:

Amazon.com is an On-line retailer of, originally, books. The company was established as a micro enterprise in the US in 1994. Since then it has enjoyed rapid expansion in all aspects of its operations, including business turnover, and a spectacular rise in share value since public floatation in 1997. New on-line sites based in Germany and UK and a distribution centre in Amsterdam were established in 1998 to cater for European markets. On August 30, 2000 Amzon.com launched its third site outside the US, Amazon.fr in France. Amazon.com sells only on-line and is essentially an information broker. It holds a relatively small, though increasing, inventory and outsources most aspects of its operations (but not IT). The
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Amazon quickly became the largest online seller of books and has since parlayed that lead and leveraged its large customer base (17 million and growing) to rapidly expand into additional retail categories. Today, Amzon.com is considered the largest and most aggressive pure-play consumer e-commerce company, offering its customer an estimated 18 million unique products : books, music, videos, toys, electronics, software, home improvement products, auctions and on-line greetingcards.

The Business Model

Amazon has pioneered a powerful new business model for electronic commerce, one which could potentially be applied to many different consumer products. It has transformed the book trade from a commodity-based, supplier-driven industry into a service-based book-buying community - a community which gives a greater influence not just to the book-buying public but also the independent publishers and authors.

Amazon.com did more than just sell books; it offered a unique, customised service : information about books that are of relevance to the individual potential customers. These include synopses, excerpts, reviews including reviews submitted by readers. Amazon.com has built-up an extensive community of buyers through positive feedback. In addition, Amazon.com accumulated a substantial database of customers' preferences and buying patterns, tied to their email and postal addresses. Such information has enabled

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