Amazon has grown exponentially from its humble roots as an online bookstore to become an Omni-faceted e-commerce and media giant, boasting diverse businesses, including fulfillment, shipping, and cloud computing services. Amazon operates various subsidiaries, including IMDb, Twitch, Whole Foods Market, and Metro-Goldwyn-Mayer, that continue its success story today.
Amazon’s unique business model relies on network effects to maintain low prices, enabling the company to pass profits from lower costs directly to customers.
It is an e-commerce company.
Amazon is best known for revolutionizing how people shop and purchase products online, offering everything from books to grocery stores and cloud computing services.
Amazon’s e-commerce platform enables third-party sellers to use its software and infrastructure to sell their products, with marketing and sales support provided and partnership with Fulfilment by Amazon to distribute and ship these items directly to customers.
Amazon operates subsidiaries outside its e-commerce business, such as streaming video services such as Prime Video, Music, Twitch, Audible, and Publishers Direct; owns a publishing division; operates film/TV studio; and produces consumer electronics including Kindles, Echo devices, and Fire tablets.
AmazonFresh service and Amazon Web Services division provide grocery delivery. Additionally, these businesses also offer cloud storage services.
It is a marketplace
Amazon is one of the world’s largest online marketplaces and product search engines, providing access to services such as Prime Video, Amazon Music, Prime Photos, and Kindle eBooks. Amazon has made numerous acquisitions, such as Whole Foods Market, IMDb, Zappos, and Twitch Audible.
Bezos launched Amazon from his garage in 1994, initially selling books online. Since then, however, its scope has expanded considerably to encompass electronics, toys, power tools, online auctions, cloud computing services, and drone delivery experiments.
Amazon allows third-party sellers to fulfill orders via Amazon Fulfilment By Merchant (FBM). FBM requires sellers to store and ship products themselves, while FBA entails Amazon warehouse fulfillment at its cost; FBA sellers pay Amazon an FBA fee in return for fulfillment services that include pick, pack, and weight fees for FBA goods as well as referral fees charged for referrals and fees for fulfillment services. Amazon may close down seller accounts at any time due to violations of policy violations.
It is a technology company.
Amazon is an industry-leading e-commerce and cloud computing provider. Offering web services such as Amazon Web Services, Elastic Compute Cloud, Simple Storage Service, and consumer electronics such as Kindle e-readers and Echo devices; publishing services are also offered, as well as film/television studio ownership.
Amazon is a customer-centric company, creating immense value for consumers through its platform. This value comes from offering consumers multiple options at low prices and fast delivery of goods, along with features like an easy-to-browse interface, review systems, and recommendations. Amazon has further reduced shopping time by shortening shipping times while providing same and next-day deliveries of its goods.
Operating Model | eBay Inc. eBay operates as a two-sided marketplace with various revenue streams, including listing fees, commission, and fulfillment services. Their infrastructure consists of warehouses and fulfillment centers to store, package, and ship products to customers and sortation centers that distribute packages based on zip code.
It is a media company.
Amazon’s business model revolves around selling products and services through its marketplace and e-commerce stores open to third-party sellers and Amazon brands. Amazon charges listing fees to third-party sellers and commissions on every sale; additionally, it operates warehouses and fulfillment centers to manage its products’ packaging, shipment, and delivery.
Amazon also uses customer data to improve its products and services, such as its new “Ask an Owner” feature, which enables customers to pose any queries about a product; its employees respond quickly and politely when answering such inquiries.
Amazon has undoubtedly drawn its fair share of criticism for its monopolistic business practices and high prices. Yet, its customer experience focus has made them one of the go-to eCommerce companies. Unfortunately, its exponential growth has come at a cost; warehouse workers have complained of poor treatment and difficult working conditions during this expansion phase.