The internet has changed the way that we perceive business and the way that we as consumers may make our purchases. Now-a-days, the online consumer knows how to purchase on the web and have the product delivered to their door in a matter of a few days. The internet revolution has seen a massive increase in the long distance purchases made by consumers, as geographical barriers are no longer as important as they were. The lack of geographical importance has influence the strategy of internet companies. One of the first companies was Amazon.com, Inc. (NASDAQ:AMZN).It’s a US-based multinational electronic commerce company. Jeff Bezos founded Amazon.com started in a garage in 1994 and lunched it online in 1995 with aims to revolutionize the market place. In May 1997, Amazon.com went public. Amazon.com started as an online bookstore, but soon diversified, selling just about everything from DvDs,MP3 downloads, videos, electronics, tools, apparel, groceries, computer software, furniture, food, clothing, industries & scientific supplies, kid’s products and so on. “We have the Earth’s Biggest Selection”, declares the company’s website. A survey conducted in 2009, revels that Amazon was the UK’s first favorite music and video retailer and third overall retailer.
In little more than a decade, Amazon.com has grown surprisingly. Amazon has driven its stock this year to levels unseen since dot-com crash. Its annual sales have grown from US$15 million in 1996 to more than US$24 billion in 2009.Its operating income has increased from US$52 million in 2003 to more than 1.129 billion today. Amazon’s net income is US$902 million (2009).Although it took Amazon.com six years to turn its first full year profit in 2001. Amazon’s initial business plan was unusual. The company did not expect profit for five years. After the dot-com crash, many e-companies went out of business. But Amazon persevered and finally turned its first profit. It was in a situation akin to the tortoise and the hare. Many dotcom ventures peaked and folded, whereas the slow and steady growth of Amazon.com acquired longevity within the market place. In 1999, Time Magazine named Bezos, Person of the Year, recognizing the company’s success in popularizing online shopping.
The key reasons for Amazon’s success and the pathway which led to such growth include not only product offering and architecture but also the operational practice. A lot of developments have been made through ventures with partners and through acquisition to develop technology. This can be seen with the acquisition of joyo.com that specializes in developing innovative technology and the partnership with Microsoft to develop E-book opportunities. Amozon.com has adopted a user review function which allows patrons to rate and discuss the books, music to share feedback. Amazon.com offers the opportunity for customers to buy and sell used products at reduced rates. Amazon’s 40 percent sales come from affiliate marketing called Amazon Associates and third party sellers. Associates get a commission for referring consumers by placing links on their websites to Amazon.com, if it results in a sale. It has more than 900000 members in this affiliate programs. A January, 2010 survey of third-party sellers by Auctionbytes.com found that Amazon was 4th overall and 2nd in “Profitability”. The domain Amazon.com attracted at least 615 million visitors annually by 2008, twice the number of walmart.com. The company is customer driven to its core. “The thing that drives everything is creating genuine value for customer. If you focus on what customers want and build a relationship, they will allow you to make money.” says founder Jeff Bezos. Everything from top to bottom begins and ends with the customer. It’s a kind of online community. Here, customers can access for products, research purchase alternatives, share opinions, reviews with other visitors and chat online with authors and experts. Direct relation with consumers has made Amazon.com the pioneer of the World’s Premier Direct Marketers and rewritten the rules of marketing.
The future for e-retailers of all kinds is economically harder than previous years. But, there are positive opportunities for Amazon. Although Amazon has opportunity for growth and development, it has to face increasing fulfillment and transportation risks. The harder economic climate would suggest Amazon to continue product offer and promotion to retain the loyalty of the consumer. Some customers have complained about the DVDs that the sound quality was poor and some DVDs weren’t presented in a Widescreen format. But Amazon.com works hard to achieve the consumer satisfaction and the best information services. It provides automated customization for users. Bezos believes, "Personalization is like retreating to the time when you have small-town merchants who got to know you, and they could help get the right products. The right products can improve your life, and the wrong products detract from it." The logotype of Amazon is an arrow leading from A to Z that represents customer satisfaction as it forms a smile. Patricia Seybold, the CEO of a worldwide business and consulting group, quoted about Amazon, "What if there was a single web destination that you could go to no matter what you needed to purchase? This personal store would save you lots of time. All of your and your family's personal profile information would already be stored on this site as a result of your earlier shopping expeditions.”
Amazon's market success depends on its ability to maintain and grow its customer base by knowing and serving its customers better than its competitors “We’re cautiously optimistic about the future.”, said Tom Szkutak, Amazon’s chief financial officer. Top executives believe that Amazon’s future depends on signing up more and more third-party retailers to sell products, whereas most analysts believe that Amazon is still crazy, fast-growth e-retailer, even without third party partners.
Resources:
• “The Future of Amazon.com” By Carrie A. Johnson
Forrester Research Inc, September 2003
• Wikipedia, The free encyclopedia
• google.com
• amazon.com
• “The Principles of Marketing” By F. Kotler
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