Amazon: Don't Overlook On It
Hello guys,
As you have seen in the title, in today's post we will discuss the business model of Amazon. How did a man doing a 9-5job become a billionaire and make an e-commerce company named Amazon? Let's discuss some serious topics like how did he manage while starting a company and how did he deal with the problems at that time.
Let's start.
Also Read: The Death Of A Case Study.
That was 1994 when Jeff Bezos left his job in investment banking and started his startup of selling books online because he understood the power of the internet at that time. He decided the name of his website as Cadabra. But that name was not appreciated by anyone, and employees of his company suggested him to change the name. He then had to choose among awake.com, browse.com, bookmark.com and relentless.com and amazon.com. And the name chosen was amazon.com because Amazon is the largest forest and largest river in the world. So he thought that he will make this company the largest e-book company in the world and he proved himself right.
Now, there are many platforms run by Amazon like - prime video (the largest OTT platform), AWS (Amazon Web Services), Alexa, Amazon Kindle, Amazon Drive, Amazon Pay, Amazon Fresh and Fire Mobile (flailed very badly), Amazon Logistics.
Amazon Logistics has given tough competition to other logistics companies. And at the current time, it is booming at the top.
There were a lot of books available on this platform when it was started. This company have got success from its initial time because it had the first-mover advantage means no other company was doing the same business that they were doing. So competition for them was zero.
1995- The journey of Amazon was started.
1996- Reached 180000 customers. ( A real quick.)
1997- The company made a total of $148 million. ( What an outcome! )
1997- Makes it a public company and listed it on the Share Market. ( Progressive )
1998- A huge revenue of $600 million. ( Estimated 405% change in revenue in just two years. )
Nowadays, the company provides a huge range of books with a minimum cost which is happily accepted by customers.
At initial, this company was making a very small profit because the profit that came from selling books was reinvested in the company.
In 1998, Jeff thought that online bookselling was not enough, so then he started to sell computers and music. And guess what? These products took the company to the next level.
In 2000, the company started selling almost all the products on its website.
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It sells its products in two models:-
- 1P Model:- In this model, the company buys products and stores them in a warehouse. After that, it makes a deal to customers and delivers the products to the targeted destination. In this model, the company is not able to make so much profit because there are a lot of expenses included such as buying a warehouse or a store. And taking care of products, successful delivery and other maintenance charges.
- 3P Model:-In this model company works as a mediator between buyers and sellers. Its work is to introduce buyers and sellers to each other. In this process, the company doesn't need to buy a warehouse. In this model, the company makes a good profit because of fewer expenses and execution of unnecessary charges.
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