Building an Empire: Amazon

Few business empires can compare to the scale and success of Amazon.com.

Amazon started a garage run by founder Jeff Bezos as an online bookstore.

However, since its 1994 humble beginning, Amazon has grown into a company worth hundreds of billions of dollars. 

This company has compiled a succession of success due in part to the company's ultra-efficient supply chain infrastructure, allowing them to deliver orders within a day to dozens of countries around the globe. 

However, it wasn't all easy for Amazon; it had challenges to overcome and innovative solutions to create in order to become the empire it is today.

Keep reading for a breakdown of how Amazon went from a garage bookseller to a global e-commerce conglomerate.

Customer Focused for Decades

Amazon was created with the idea of putting the customer first. Since its founding, Amazon has focused on convenience and customer experience at the forefront of everything it does. 

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Service experience satisfaction concept

Jeff Bezos canned this belief by stating, "We're not competitor obsessed; we're customer obsessed".

This customer focus extended beyond competitive pricing for customers; it incorporated everything from free deliveries on certain orders to same-day deliveries and developing user-friendly websites.

Amazon Overcame the Dot-Com Burst

Less than a decade after starting, Amazon was forced to navigate through the dot-com bubble burst.

This is when a number of websites and web-based companies went bankrupt due to markets being in a bubble.

During this challenging period, Amazon doubled down on two key things: innovation and expansion.

This kept the company afloat and allowed for steady growth throughout the harsh economic climate that pulled down several other large websites.

Amazon expanded its products from “just books”, upgrading into gadgets, clothing, and more options, with the promise for them to be delivered at your doorstep. 

This allowed the company to bring forward a wider customer base and increase margins of return for them.

Amazon's Path To Success

How Amazon uses Technology

Over time, Amazon's business model was getting more established. They decided to include cutting-edge technologies to help optimize orders. 

The technology also helped employees manage their inventory within the logistics in the supply chain. 

These developments included:

  • Automation: Since their first early beginnings they’ve been adding innovation in their logistics, but it was in 2012 when Amazon bought Kiva Systems for $775 and is now incorporated as Amazon Robotics as a subsidiary.
    Since then they’ve integrated robots in their warehouses and fulfillment centers.
    The robots help improve packing, picking, and shipping times.
  • Algorithms: Sophisticated algorithms help predict when a customer will demand a product.
    That way, retailers know which stock to have more and which to reduce. 
  • Delivery Network: Amazon had to increase its delivery network to meet same-day deliveries as promised. This included better placement of sortation centers and stations, which helped reduce the delivery costs and time it took to ship orders.
  • Amazon Prime: Launched in 2005. It quickly became a hit in the online commerce world. It helped to give two-day free shipping to all Prime members, which is like a loyalty program to encourage customers to keep shopping and repeat purchases.
  • Amazon Web Services (AWS): This was the start of cloud computing and is now one of Amazon's best revenue streams because it's proven to be a reliable server infrastructure.
    In 2021, Amazon generated $24.8 B in operating profits, while AWS was responsible for $18.5 B, that’s 74% of the profits and was credited with having 31% of the market share of cloud services.

Customer Focus

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