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Do you know how big is Amazon?

Amazon is the World’s largest online retailer and has more than one trillion valuation.

Amazon is founded by Jeff Bezos who is now the richest person in the world. 

Its Amazon who had made him World’s Richest Person. 

So let’s start Amazon case study of the World’s largest online retail company. 

What’s In It for Me. 

Amazon Case Study- Company Overview

Amazon is a Global E-Commerce Giant. It is an Internet-based company that sells electronic goods, apparel, movie books and every good that can be sold online on its Platform Amazon.com. Amazon was founded by Jeff Bezos in 1994.

Amazon has more than 7.5 lakh employees. Amazon is the most valued retail store in the United States by market capitalization. Amazon runs its business in several countries and segments.

Amazon has its marketplace where third parties can sell her products, Amazon has Kindle Platform where he sells E-Books, Amazon also has Audible where he sells Audiobooks, Amazon also has Amazon Prime platform which is an OTT Platform. Amazon has several more Business That we will cover later in this Blog.

Amazon Case Study Amazon Business Model

Amazon launches its Marketplace in India in 2012 after 17 years of Its existence. India’s third-largest economy in the world and has an emerging e-commerce Industry Thus India provides amazon a great Opportunity. India is a price-sensitive market and thus it’s become difficult for companies to become Profitable in India.

That’s why Amazon Operating its business in a loss in India. When Amazon launched its business in India there were fewer people in India who do shopping Online But after Jio Revolution Now There is a lot of internet user who does online shopping. Amazon has 150 million registered customers in India and 100 Million customers who have made a transaction with Amazon.Amazon’s margin is low but sales volume is high. We can hope soon Amazon Will become profitable in India. 

 

Brazilamazon.com.br
Canadaamazon.ca
Mexicoamazon.com.mx
United States amazon.com
Chinaamazon.cn
Indiaamazon.in
Japanamazon.co.jp
Singaporeamazon.sg
Turkeyamazon.com.tr
United Arab Emiratesamazon.ae
Franceamazon.fr
Germany amazon.de
ItalyAmazon.it
Netherlandsamazon.nl
United Kingdomamazon.co.uk
Australia amazon.com.au

How Amazon Started 

Amazon started on July 16, 1995, by Jeff Bezos. Jeff Bezos chose Amazon as the name of His Business because the name is Started with the first letter of Alphabet and the second is the name of South American River.

Initially, he sells only books on his platform. There is another company too who sells books online before Amazon It is Computer Literacy. Amazon runs his business with the sole aim to provide any book to any reader.

Amazon reached 160000 Customers by the end of December 1996. The reason behind reaching this customer fast because their site was user friendly and encourage the user to add their honest review.  Amazon generates $15.7 million in 1996 and $148 million in 1997. To grow its business with much growth Amazon launched its IPO and raised $54 Million and listed his stock on Nasdaq. 

Amazon Business Model Amazon Case Study

 In 1998, Amazon began to sell CDs on its platform and later he added videos. The company expands its business rapidly in other segments. The company also started his international bookselling in the same year by acquiring international booksellers in the united kingdom and Germany. By the year 1999, Amazon started selling consumer electronics, video games, software, home improvement items and much more.

The biggest thing of that time was that Amazon offers personalized product recommendations based on their previous history of purchase. Amazon also encourages its users to post reviews that help other customers to find the right products. All this type of activity gained the trust of Customers and Amazon made a loyal customer base.

How Amazon Started Amazon Case Study Amazon Business Model

In 2002 Amazon launched Amazon Web Services and became an Internet Technology company, too. The company also enables small businesses to sell their products through Amazon in the same year and By 2006 Amazon launched Fulfillment by Amazon services who manage the Inventory of Business.

Amazon Purchases Kiva Systems are now known as Amazon Robotics That made Robots and helps Amazon in inventory fulfillment duties. Amazon continuously grows his business and acquires many other companies to diversify his business. Amazon also acquired Some Trails companies such as Zapoos.com to reduce competition and expand his business furthermore. In 2007 Amazon Launched Amazon Kindle that sells e-books. Amazon Launches Its Business In India in 2013.

Business Model of Ecommerce

Till now you have heard Amazon is a big successful company. Now I will tell you what is the business model of Mazon that’s made him so successful. Amazon is an Online Marketplace where a lot of people come and buy the products and think that all products are on Amazon. Amazon is a marketplace where sellers can register their businesses and sell their products.

Amazon charges Some commissions from these retailers to use their Platform. Amazon Provides a Ready platform where a merchant can easily sell their products. Amazon also provides shipping services. Merchants on its platforms have two options for shipping: one Amazon Easy ship which is a logistic service from Amazon and another is Selfship.

Amazon Case Study Amazon Business Model

If Merchant uses Amazon Easyship he has to pay to ship for it that he will charge from its Customer. Amazon Also made revenue from Its Advertising services in which merchants can feature their products on this marketplace.

Amazon also uses a subscription model in which it sells Amazon Prime Subscription that gives users Free shipping, access to its Amazon Prime Video or Amazon Prime Music. So lets deep dive into Business Model of Amazon

1. Amazon Marketplace

Amazon Marketplace is its primary business model and Amazon makes most of the revenue from this. In this Marketplace, merchants can sell their goods on this platform to direct customers.

Amazon charges some commission from Merchants to use their Platform on a per transaction basis. Amazon offers two Shipping options to its Merchants One Amazon Easyship and Another is Self shipment.

Amazon Case Study Amazon Business Model

Amazon charges some charges for Amazon Easyship. Amazon Also Offers Fulfillment by Amazon in which a user can stock their goods in Amazon’s good and whenever order will come Amazon will ship their order. 

Amazon Case Study Amazon Business Model

2. Amazon Prime Subscription

The other Revenue model of Amazon is Amazon Prime subscription that is a recurring business model of Amazon. In Amazon Prime Subscription amazon gives customer free Delivery to its customer and gives access to Its Amazon Prime Video Platform where users can watch web series and Movies and also to Amazon Music where users can listen to audio tracks. 

3. Amazon Kindle

Amazon Kindle is an online book store where Amazon sells ebooks. Amazon is also a type of marketplace where book publishers can publish their e-book and Amazon charges some commission from the Publisher. Amazon also sells subscriptions for Amazon Kindle.

Amazon Kindle Amazon Case Study amazon Business model

4. Audible 

Audible is an Online store of audiobooks where people can listen to audiobooks of books, magazines, and newspapers. Amazon also sells audiobooks and subscriptions to Audible.

Audible Audiobooks Amazon Case Study Amazon Business Model

5. Amazon gaming 

Amazon Gaming Studio is Amazon’s subsidiary that sells their games or third-party games. 

Amazon recrute des talents dans les jeux vidéo pour des projets ...

6. Amazon Patents

Amazon also owns several patents that are used by many companies. Amazon earns royalty from these patents. Amazon owns 1263 patents. 

Amazon patents cover everything from AI, drones to virtual reality ...

7. Amazon Web Services

Amazon Web Service is also known as AWS is a world-class IT Infrastructure company that provides its service to many renowned companies one of them is Netflix.

Amazon Web Services (AWS) | LinkedIn

 Above are the top source of revenue of Amazon. Amazon owns many other small companies and has different business models Amazon app Store and Zapoos.com etc. 

How Much Amazon Earns 

Amazon is a big company and generates revenue from different business segments. As per Quarter 3, 19 Amazon generates  $280.52 Billions from it’s all business. This revenue was 20.5% from its previous year.

In the previous year, Amazon made $232.89 Billion. Amazon makes $1230.86 per second. Net Profit of Amazon before Interest and Taxes is $37,365,000 for the 2019 year. As per 2019, Jeff Bezos’ net worth is 110 Billion. Jeff Bezos earns $81480 salary per annum since 1998 from Amazon.

How much Amazon Earns Amazon Business Model Amazon Case Study

In 2017, Jeff Bezos surpassed the Bill gates Founder of Microsoft to becomes the richest person in the world. As per a survey Jeff Bezos makes $78,500,000,000 per year. 

 

Total Revenue280,522,000
Cost of Revenue205,768,000
Gross Profit74,754,000
Net Income11,588,000
EBITDA37,365,000

 

Management Team of Amazon 

Management Team is an important part of every successful business. Jeff Bezos is CEO and Founder of Amazon who has credit for Amazon’s Success. His Successful venture made him the Richest people in the world.

Jeff Bezos is the first centi billionaire. Jeff Bezos was born in New Mexico on January 12, 1964. He had studied computer science and electrical engineering at Princeton University.

Amazon Case Study Amazon Business Model

After Graduation from Princeton University, he worked as a Vice President of Investment DE Shaw. Jeff Bezos quit her Job in 1994 to open an Online Books Store. Jeff Bezos saw that the internet has a lot of potentials and the online book store market is untapped. He named her to venture Amazon.com based on the South American River. 

Jeff Bezos Worked several months to build his online store and after creating it he asked 300 people to test his website. Amazon has had great Success in Its Year Without any press Promotion. We have already discussed the story of Amazon. Now Jeff Bezos’s venture becomes the Second company in the world who has surpassed the valuation 1 Trillion dollars. Jeff Bezos also founded many other Successful companies like IMDB, Amazon, Blue Origin And Washington Post. 

Management Team of Amazon 

NamePost
Jeff BezosFounder
Andrew JassySVP Web Service
Shelley ReynoldsVice President
Garett GentryHead HR
Michael StoverProduct Management
Akersh SrivastavaTechnology Evangelist
Grant McAlisterSenior Principal Manager
Karthikeyan RaviSenior Software Development Engineer
Bing GordonBoard Observer
Alain MonieBoard Member

 

Digital Links of Amazon

Websiteamazon.com
FacebookView on Facebook
LinkedIn View on LinkedIn
Twitter View on Twitter
Phone Number (888) 533-5659

Fun & Facts of Amazon

Industries E-commerce, Retail
CEO & FounderJeff Bezos
Founded DateJul 5, 1994
Operating Status Active
Funding Status IPO
Legal NameAmazon Inc.
No. of Employees10000+

 

Popular Companies Owned By Amazon

Press Kit | Zappos.com | Zappos.com | Amazon Case Study | Amazon Business Model

1. Zappos

Zappos is one of the largest online stores and was acquired by Amazon in 2020. Amazon paid $1.2 Billion to acquire this venture. Amazon did not merge Zappos with his Venture Amazon. Both entities are run separately. 

IndustryEcommerce, Retail
FounderNick Swinmurn
Founded Date1999
Operating Status Active
Websitewww.zappos.com

Lamar Store | Whole Foods Market | Amazon Case Study Amazon Business Model

2. Whole Foods

Whole Food is one of the biggest grocery chains. Amazon acquired Whole Food for $13.7 Billion and it is one of the biggest acquisitions by Amazon. Whole Foods runs its business in its brand name and did not merge its operation with Amazon.

IndustryConsumer Goods, E-commerce
FounderWalter Robb
Founded Date Jan 1, 1978
Operating Status Active
Website www.wholefoodsmarket.com

Judge Blasts California A.G.'s 'Abuse of Power' in IMDb Case – Variety

3. IMDB

The Internet Movie Database Known as IMDB is a popular movie rating website. Amazon bought IMDB in 1998. Companies make money with the IMDB Pro service. IMDB has a database of 1.8 million movies and 100 million users per month. Amazon uses IMDB to promote its Movies Related Products. 

 

Industry Media & Entertainment, Content
FounderCol Needham
Founded DateOct 28, 1990
Operating StatusActive
Websitewww.imdb.com

logo-washington-post - Central Tibetan Administration

4. The Washington Post

The Washington Post is a popular and 140-year-old newspaper. Jeff Bezos bought The Washington Post for $250 Million. The Washington Post also owns a website. The website features articles in categories such as politics, opinion, local, sports, national, world, business, tech, lifestyle, entertainment, and more.

IndustryContent, Digital Media
Legal NameWP Company LLC
Founded DateJan 1, 1877
Legal NameWP Company LLC
Website

www.washingtonpost.com

Amazon Case Study

5. Alexa: Web ranking & Analytics

Alexa offers website analytics and ranks. The Company founded in 1996 and Amazon Acquired Alexa in 1999. ITs Provides insights of digital behavior that marketers use to win their audience and accelerate growth

 

Industry Content Marketing
Founded DateApr 1, 1996
Founders Brewster Kahle, Bruce Gilliat
Operating Status Active
Website www.alexa.com

Almost Everything About Goodreads Is Broken - OneZero

6. Goodreads 

Goodreads is one of the world’s largest websites of book reviews and recommendations. Goodreads have more than 65 million members. The company was founded in 2007 and Acquired By Amazon in 2013.

IndustriesE-learning, Social Media
Founded DateJan 15, 2007
FoundersElizabeth Khuri, Otis Chandler
Operating StatusActive 
Websitewww.goodreads.com

Amazon Research Project Reportedly Testing Robotic Picking Arms

7. Kiva Systems

Kiva Systems was founded in 2003 who develops and manufactures robotics systems for different uses. Kiva Systems is now rebranded as Amazon robotics. Amazon Purchases Kiva Systems in March 2012 for $775 Million. Amazon did not sell kiva’s products on its e-commerce platform.

 

IndustriesRobotics, Software
Founded Date 2003
FoundersMick Mountz, Pete Wurman
Operating System Active
Website www.kivasystems.com

Amazon Case Study Amazon Business Model

8. Pillpack 

Pillpack is an online Pharmacy Company founded in 2013. Amazon Purchased it for $753 Million in June 2018. By using Amazon’s extensive delivery network, PillPack ships prescription medications overnight to locations across the country.

IndustriesHealthcare, Hospital
Founded DateJan 31, 2013
FoundersBrian Hoffer, Elliot Cohen
Operating Status Active
Websitewww.pillpack.com

Twitch An amazon Company Amazon Business Model

9. Twitch Interactive

Twitch Interactive is an Online Video Platform that was founded in 2011. In 2013 It had 55 million unique visitors per month. The Platform is very popular among video games by acquiring it. Amazon expands its business in the Gaming Industry. Amazon purchased Twitch Interactive in 2014 for $970 Million.

 

Industry Video Game, Video Streaming
Founded Date2007
Founders Emmett Shear, Justin Kan, Kevin Lin
Operating StatusActive
Websitewww.twitch.tv/

Audible Audiobooks: Stories & Audio Entertainment - Apps on Google ...

10. Audible 

Audible is the largest producer and seller of audiobooks in the United States. Audible provides premium spoken content such as audiobook versions of books, magazines and radio programs. Audible Was founded in 1995 and acquired by Amazon in 2008.

IndustriesAudio, Digital Entertainment 
Founded DateJul 21, 1995
FoundersBing Gordon, Don Katz, 
Operating StatusActive
Website www.audible.com

 

Funding Raised By Amazon 

Every venture needs funds to grow and run a business. Amazon makes his venture successful by bootstrapping. Amazon has raised $108 Million Funding in a total of 2 rounds. Amazon also launched its IPO in 1997. Amazon raised $54 Million in its IPO. Amazon launches its share at the Price of $16M and Valued at $458.

Funding Raised$108
IPO Launch Date15 May 1997
IPO Valuation$458
Share Price$16
Stock Exchange Nasdaq

 

Amazon’s Debt on 31 December 2019

Short Term Liabilities$87,812,000 
Non-Current Liabilities$75,376,000
Total Liabilities$163,188,000

Company Acquired By Amazon

Amazon has acquired Many companies. Some of them are Many popular companies. There are 2 types of expansion Horizontal expansion or vertical expansion. The horizontal expansion means when companies acquire other companies to reduce their competition or diversify their business. Vertical Expansion means when a company buys another to help in its operation. Amazon has made both types of acquisitions to Make his venture Successful venture of The Globe.

List of Recent Companies Acquired By Amazon

Company NameAcquisition Name
Health NavigatorOct 24, 2019
INLTSep 25, 2019
E8 StorageJul 31, 2019
Canvas TechnologyApr 10, 2019
eeroFeb 11, 2019
DispatchFeb 11, 2019
CloudEndureJan 8, 2019
RingJun 28, 2018
BlinkDec 22, 2017

 

SWOT Analysis of Amazon 

Strength 

  1.  Amazon is a Global E-Commerce Giant and It has a Strong Brand name.
  2. Amazon also has a strong Brand Valuation Worth $125 B.
  3. Amazon’s Prices are very affordable to consumers that make Amazon Customer Oriented brands.
  4. Amazon is continuously innovating his venture and comes up with new ideas that make Amazon a Different from others.
  5. Amazon 562.3 Million in its Marketplace Amazon .com That shows amazon has largest merchandise selection
  6. Amazon is a global giant but uses different strategies according to particular countries. 
  7. Amazon Also owns many other companies that help Amazon in its operation.
  8. Amazon has its own distribution and logistic system which is very important for Every E-Commerce Giant

Weakness

  1. Online Business is now becoming so easy to start and there are a lot of other companies like eBay, Flipkart and Myntra giving tough Competition to Amazon
  2. Amazon is Global Giant and operates its business in several countries. In Somes Countries Its making Loss.
  3. Due to extensive Price wars, Amazon’s margin is shrinking day by day.
  4. Amazon spends a lot of money to acquire new customers and works on customer lifetime value but this does not work all time some people are online Price sensitive, They only buy from where they find cheap. 

Opportunity 

  1. Amazon has an opportunity to expand in many other developing countries where the e-commerce industry is in a growth phase. 
  2. Amazon can acquire other e-commerce companies to reduce its competition.
  3. Amazon can open Physical stores in many countries.
  4. Amazon also has an opportunity for horizontal expansion means Amazon can buy other small and big companies that help Amazon in its operation like logistics. 

Threats 

  1. The Ecommerce Industry has low entry barriers which mean anyone can open Business like Amazon.
  2. Amazon has to Face many government regulations in developing countries related to Multi-Brand Ecommerce compliance. 
  3. The other threat amazon has to face is competition in countries like India some local players Flipkart, eBay, and Myntra, etc are giving tough competition. 

Investment Made By Amazon 

Amazon is a big company that has made a lot of investments in many companies. Some of them will help in its operation and rest will be the purpose of Investment. Now Amazon has Made a Total of 89 Investments. Following is the list of Most Recent Investments made by Amazon.

Organization NameFunding RoundAmount
Bank Bazaar.comSeries D$3.8 M
Capital FloatVenture Round$15 M
Amazon PayCorporate RoundRs 13.5 B
ZobiGrant$100K
RivianPrivate Equity Round$1.3B
lonQSeries B$55M
CargojetPOST IPO Equity
QdigiCorporate Round$7.4 M
DeliverooSeries G$575 M

 

Future Plan of Amazon 

  1. Amazon is focusing on launching cashier-free stores.
  2. Amazon is also working on drone delivery.
  3. Amazon is also constructing human robots that help in house cleaning etc works
  4. Amazon also has big plans for Its Product Alexa which is a cloud-based voice assistant.
  5. Amazon is also getting into the healthcare industry.
  6. Amazon is investing more money in Amazon Prime to add more shows.
  7. Amazon bought his vehicles to deliver products to your doorstep. Amazon plans to buy 100000 electrical vehicles by 2030.
  8. In many developing countries amazon Provides Jobs. In India, Amazon announced it will create 1 Million Jobs in India By 2025.