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Amazon: From An Online Book Store To A Trillion Dollar E-Commerce Giant

By November 28, 2021No Comments

Before blasting off to space, Jeff Bezos was a regular guy. He had an office job and even hated it too!

Bezos was a former Wall Street hedge fund executive who analyzed the greater possibilities of investments via the internet. Examining the trends led him to realize that there was vast potential for growth and sales on the Web.

He then quit his job and let this entrepreneurial spark guide him to the development of one of the most successful companies in the world: Amazon.

Seeing how big of a platform Amazon currently is, it is mind-blowing to think about its beginning.

The Garage Bookstore

Jeff Bezos left his profitable position at an investment bank to create a startup company back in 1994. After thorough research, he made a list of what possible products could be lucrative to sell once they went online.

With a degree in Computer Science and Electrical Engineering and a handful of staff at bay, he initially launched Amazon as an online bookstore from his garage.

The company’s name was inspired by the largest river in the world—akin to Bezos’ aspiration to become the largest bookstore worldwide.

This move was, in fact, a marketing strategy since it would always be listed higher in numerous alphabetized lists, thus garnering more attention.

Initially, Amazon was able to rake in around $610 million as of 1998 from just being an online bookstore. Eventually, the company expanded by allowing third-party sellers on this platform to pave the way for consumers to access unique and rare items online.

Since then, Amazon has become the web giant we know and love today.

Amazon currently has merchant partnerships with multiple companies, logistical services, and even numerous product lines and services. Because of its various products, the company’s market value as of 2021 has become $1.557 trillion.

How the Business Came to Be 

This company used strategies to set itself apart from its competitors. We’ll examine some of them now:

“Get Big Fast” Mindset

Intending to be the largest online bookstore back in 1994, Bezos implemented the “Get Big Fast” Strategy. This maximized the growing potential of the internet by allowing third-party sellers to start selling electronics, video games, software, toys, games, and home items.

Below are the three main concepts under this mindset:

1. Personalization Equals Profitability 

Despite the growth Amazon has acquired over its first few years, it still was a common online platform. So to set it apart, Amazon fine-tuned its online services to allow the platform to recommend new products based on the algorithm of a consumer’s purchase history and data from similar buyers of each item.

2. One-Click Buying 

Back then, Amazon had its leverage to make sure consumers felt they were directly purchasing from Amazon despite the number of sellers.

But how does one-click buying fit into this picture? Unlike its competitors back in the day, Amazon allowed its consumers to complete their payments or transactions without leaving the platform. This created a user-friendly environment that fostered convenience and ease at just a click of a button.

3. Seller Fulfillment

As a component of online shopping, sellers play a crucial role in facilitating service delivery. Amazon took pride in supporting sellers in their earlier years by innovating ways to ensure that their products could reach the end-users.

They allow sellers to stow their products in their massive warehouses known as fulfillment centers. Amazon is then responsible for logistics, customer service, and product returns.

These alone are cost-effective strategies that aim to support small businesses on the platform.

Marketing Strategies

Aside from the physical aspects of this online platform, the success of Amazon may also be grounded in its marketing and sales tactics. Let’s take a look at a few strategies employed by the company.

Customer Obsession

Compared to their competitors, Amazon developed a reputation for being “customer-obsessed.” The platform consistently provides a wide array of merchandise at low prices at the customer’s convenience.

Their focus to deliver the best experience paved the way for developing a system that constantly analyzes and tests market opportunities in the digital world. It even fostered the creation of their loyalty program—one of their key features to date.

Having thrilled customers creates an engaging atmosphere that makes them keep coming back for more.

Optimized and Targeted Emails

Amazon decided to send email campaigns that covers new releases and recommendations catered to each customer.

In addition, they wanted to decrease the frequency of sending multiple emails in a week to benefit consumers.

Partnerships are Key

To further expand its coverage, Amazon was smart in investing in its merchant partnerships from different sectors. As a result, it has become a great way of facilitating promotion and product distribution worldwide.

In turn, this led to the development of a performance-based incentive system that encourages Amazon affiliates to sell more products.

What Can We Learn from Amazon’s Success?

Value of data and processing: Data processing has always been key in driving Amazon’s success in the industry. With the data adequately processed, the company can experiment through their test groups and evolve current features before being released to the public.

Don’t be afraid to experiment and fail: Experiments are necessary to iron out the kinks of projects before launching. But keep in mind that despite numerous experiments, there may be opportunities bound to fail. One must then be able to take these lessons and adapt to an ever-changing environment.

Be customer-centric: Customers always appreciate whenever these types of platforms pursue their best interests. This may be in the form of creating a user-friendly interface down to providing details that will keep the customer’s mind at ease.

Innovate, innovate: Can you imagine that Amazon began as an online bookstore? One of the superpowers Amazon deployed was that it was ok to disrupt its own business. It was never comfortable with where it was, and it was never ok with “average”. Never underestimate the power of ideas and critical thinking and being able to uproot and disrupt your own business, as this may be the boost & advantage your business needs.

Final Thoughts

Amazon is now one of the largest e-commerce platforms that took advantage of a then-growing industry. It has made trillions of dollars due to its data-driven strategies for the benefit of its key stakeholder, the consumers.

Be obsessed with customers, disrupt yourself and always be optimizing. Lessons straight from the Amazon playbook.


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