General information of amazon.com by Umair Mirza

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International Retail Practices of Amazon
Executive Summary
Amazon is one of the famous and a giant online retailer in the world. Amazon’s name is given
by Jeff Bezos which highlight the vision of company, to create a huge selection of products
like Amazon river. The company is currently the biggest pure online retailer, rank 1st and
overall rank 7th and they declared itself as the “Earths most customer centric company” where
customers can find anything which they want. Company’s focus is on three main components
are low price, large and best selection and fast convenience. The customers can find and buy
millions of new and used items on amazon. The famous products are books, healthcare
products, jewellery, computers, digital downloads, toys, automobiles and much more.
Once Jeff Bezos was an employee in the firm. He desired to start its own company where he
want to introduce himself as a leader. He was searching about the internet boom in the future.
The positive results help him to take a decision. He started from books selling and now every
product from A to Z is available on his web, which he defined in his logo.
Amazon is continuously investing and focusing on innovation department to create and
maintain its competitive advantage in the market. The company has buy some other companies
like IMDB, Alexa, Fabric.com, audible.com, pets.com and Zappos and many more. The
company has also acquired whole food chain investing about 13.7 billion dollars. The company
has designed such model that company is not just earning profits but is also giving a platform
for public to sold their used items.
Moreover, the company’s major focus is to sell products anytime anywhere they want. For this
purpose, company has created some useful strategies that attract customers and show them that
how much company is caring for their buyers. When come to its financial records, these are
extraordinary. In 2016, company’s revenue was $135.98 billion and total assets were $83.402
billion.
Introduction
Company Name Amazon
Type of Company Online Retailer
Founder & CEO Jeff Bezos
Headquarters Washington, America
Area served Worldwide
Key people Werner Vogels
No. of Employees 541,000
Total assets $83.402 Billion
Website www.Amazon.com

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History and background
Jeff Bezos is the founder of Amazon. He was the vice president of D. E. Shaw & Co., a wall
street firm. In 1994, he left the company and started to work on a plan, which is now called
Amazon.
Jeff Bezos read a report about the future of internet growth that was 2300% in web commerce.
This time, he took a decision to start an online business. He began and make a list of 20 products
which could be marketed online. He changed his plan and limit the list to 5 products which
include: computer software, videos, books, compact discs, and computer hardware. Bezos
again take a U-turn and decided to sell only books online, because of the high demand of
literature worldwide. The company offered books online at the lowest price in market, and the
huge number of titles will be available in a printed form.
In 1994, he stared the company named as Cadabra, Inc. After some days, Jeff Bezos changed
the name as Amazon, inspired by world’s largest river due to 2 reasons. The first is to suggest
the scale “Earth’s biggest book store” and second, back then website listings were often
alphabetical. He planned to make his store the biggest store in the world. Initially, it was an
online bookstore, which was an idea of John Ingram of Ingram Books along with Keyur Patel,
who still holds a stake in Amazon. Amazon was able to access books at wholesale from Ingram.
In July 1995, the company started service and sold its first book on Amazon.com. It
was Douglas Hofstadter's Fluid Concepts and Creative Analogies and Computer Models of the
Fundamental Mechanisms of Thought. Some unexpected positive results were received at that
time. In the first two months of business, Amazon sold books in all 50 states and over 45
countries in the world. Within two months, Amazon's sales were up to $20,000 per week. In
October 1995, the company announced itself to the public. In 1996, it was reincorporated
in Delaware. Amazon issued its IPO of stock on May 15, 1997, trading under the NASDAQ
stock exchange symbol AMZN, at a price of $18.00 per share.
In 1997, Barnes and noble sued on Amazon that amazon claims that they are the largest
bookstore but they are not. They are actually a book broker. Amazon won that case and
continued their operations with the same claim. In 1998, Walmart sued on amazon that they
had stolen their secrets by hiring former Walmart executives. This claim was also settled out
from court and amazon had to implement internal restrictions and the reassignment of former
chief executives.
In 2000, amazon changed his logo and make a curved arrow from A to Z, which is look like a
smile. The purpose of changing in that logo was that amazon is offering all the products from
A to Z.
Amazon’s beginning plan was not favourable enough and owners were unable to get profits for
4 to 5 years. Stockholders were claiming that company is not generating profits and even it will
not survive in future. It was a difficult time because many of the other online companies were
bankrupt or did not survive in market for a long. But amazon had continued its operations with
a strong vision to became a huge online store. Finally, amazon turned its profits in the fourth
quarter of 2001 which was 5 million dollars. Due to its success, Time magazine named Bezos,
“The person of the year”. Now, Bezos was thinking that it is now a right time to change or
extend their business model. He extended the category of products on its website for sale.

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In 2011, company plan to open convenience stores and develop curbside pickup locations for
food. In December 2016, the Amazon Go store was opened for Amazon employees in Seattle.
The employees can do shopping and their bills will be paid automatically from their accounts
when they leave the store. This has eliminated the long lines from billing. This store has now
been introduced for general public in early 2017. Bezos, in 2017, has planned to invest in food
industry and acquire whole foods, a high supermarket chain with over 400 stores for 13.7
billion dollars. The acquisition was seen by media experts as a move to strengthen its physical
holdings and challenge Walmart's supremacy as a brick and mortar retailer. On August 23,
2017, Whole Foods shareholders, as well as the Federal Trade Commission, approved the deal.
In 2011, amazon had 30,000 employees in USA and 180,000 employees at the end of 2016.
The company has now 541000 employees worldwide.
Moreover, the company has launched special websites for 15 countries in 11 different
languages for the convenience of their customers. It includes following countries: China, Japan,
India, Singapore, France, Germany, Italy, Netherland, Spain, UK, Canada, Mexico, USA,
Australia, and Brazil.
Products
 Amazon Launchpad Tools & Home Improvement
 Appliances Toys & Games
 Video Games Sports Collectibles
 Apps & Games Patio, Lawn & Garden
 Arts, Crafts & Sewing Pet Supplies
 Automotive Software
 Baby Sports & Outdoors
 Beauty & Personal Care
 Books
 CDs & Vinyl
 Camera & Photo
 Cell Phones & Accessories
 Clothing, Shoes & Jewellery
 Collectible Coins
 Computers & Accessories
 Digital Music
 Electronics
 Entertainment Collectibles
 Gift Cards
 Grocery & Gourmet Food
 Health & Household
 Home & Kitchen
 Industrial & Scientific
 Kindle Store
 Kitchen & Dining
 Magazine Subscriptions
 Movies & TV
 Musical Instruments
 Office Products
 Prime Pantry

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How Amazon runs their operations worldwide?
Business Model
Amazon employs a multi-level e-commerce strategy. Amazon started by focusing on business-
to-consumer relationships between itself and its customers and business-to-business
relationships between itself and its suppliers and then moved to facilitate customer-to-customer
with the Amazon marketplace which acts as an intermediary to facilitate transactions. The
company has provided a platform to sell anything to anyone.
Some other large e-commerce sellers use Amazon to sell their products in addition to selling
them through their own websites. The sales are processed through Amazon.com and end up at
individual sellers for processing and order fulfilment. Small sellers of used and new goods go
to Amazon marketplace to offer goods at a fixed price.
Company’s major focus
The company’s major focus is on 3 elements:
1) Provide products at low prices
2) Offering large collection of products
3) Fast Convenience
Key success strategies worldwide
 Know the market and industry by strong R&D department
 Focus on value adding features for customers
 Logistics
 Use of acquisitions, alliances and strategic partnership
Supply chain management
One of the major contribution in success of amazon is its efficient supply chain management
which is rank the 2nd most efficient supply chain in the world.
Amazon’s supply chain process is simple and cost effective. It starts with the customer placing
an order. The order prompts a red light to come on in the warehouse which shows the worker
the products that have been ordered, and the bar code is matched with the order. The product
is then placed in crates on a conveyor, which goes through the distribution center before being
sorted by bar codes. Crates arrive at the central point, and bar codes of products are matched
with orders and sorted automatically into one of several thousand chutes before going into a
box. The bar code then identifies the customer order, boxes are packed taped and weighed, and
they are shipped by either US postal service or UPS for the last mile, arriving at the consumer
within 1 to 7 days.
In 2013 the company has started a shipping project which is called as Dragon Boat, which
would slowly take over all shipping and logistics direct from manufacturers in China and India
to its customers across the United States. In addition, amazon also bought a fleet of more than
4000 trucks and got 20 aeroplanes on lease for supplying the products to its customers across

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the country and other country’s fulfilment centres. This shows company is spending billions of
dollars on its shipping process.
Products delivery Strategies
Amazon prime is the heart of this company. This has change the way of treating the customers
in such a way that is beneficial for both the company and customers.
Ordering 25$ or more by “Prime customers” of two days delivery and two hours “Prime now”
deliveries do not require shipping cost in the certain cities on more than 25000 items.
The company is offering products in multiple ways.
 One/two day delivery deals
 Own logistics
 Amazon Fresh, grocery delivery system
 One-hour delivery
 Online travel business
 Prime Air
 Automated warehouses and fulfilment centres

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Game changer strategies
Some of the amazon’s strategies have boost this company high and provides a lion’s market
share in the world. One of the most effective strategy is “To target every geographical area”.
There was a time when amazon entered in India and suffered from losses of 359 crores.
Company was obliged to sold its products below the per unit cost. But with the passage of time,
amazon has proved itself that they really care about their customers and will provide what they
want and no matter where they are.
Amazon had started to target every geographic area in India. They invest in the convenience
and supply their products at that areas where it was difficult before. This was a competitive
advantage which was helpful to gain high market share not only in India but all over the world.
There are several countries which are suffering from different kind of serious issues and many
of the online companies do not try to target these countries. Amazon pick this strategy and
supply their products in that countries.
The next game changing strategy of amazon is “Customer centric strategy”.
Amazon called itself “Earth’s most customer-centric company” and it is their mission on which
they are working.
Jeff Bezos once said:
“We see our customers as invited guests to a party, and we are the hosts,” Bezos has said. “It’s
our job every day to make every important aspect of the customer experience a little bit better.”
Amazon is worried about the needs of customers and they will fulfill their needs. It means they
value their customers. This strategy includes:
 Being customer driven
 Having a focus on customer satisfaction
 Providing great customer service
 Focus on the customer experience
 Enhancing customer journey
 Listening to the “voice of customer” and respond them
 Place a high importance on the conversation with the customer
 Focus on the reduction of customer friction
Amazon is focusing on earning and keeping the trust of their customers and because of this
amazon is continuously improving the 4 components which the customers desires. These 4
components include:
 Lowest Price
 Fast convenience
 More selection
 Best Experience

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Innovation department and Software development centres
Innovation department and Software development centres are key elements in the rise of the
amazon so quickly. Amazon rank 1st in spending its Innovation department with an amount of
16.1 billion dollars annually. Software development centres are busy in innovation and
searching what they should provide their customers differently. There are 53 software
development centres worldwide. Some of the best innovations of amazon are:
 Amazon Go – Introduced in Seattle, it is a new kind of store with no checkout
required. Customers take products and go.
 Prime - One of the world’s most popular subscription services
 Amazon echo - A device around your voice
 Prime air - Drones use for packages in 30 minutes or less
 Dash button - 1 click ordering at home
 Prime now - One hour delivery for prime members
 The Mayday button - Connect to an amazon tech advisor, live on your screen
 Kindle - A first of its kind portable reader
 Fire Tablets - Bringing movies, tv shows, app and much more to customer hands
 Amazon Fresh - Same day and early morning grocery delivery
 Amazon fulfilment Network - Cutting edge technology, 50000+ employees
 Frustration free packaging - Recyclable and comes without excess packaging material
Order fulfilment centres and warehousing
There are 264 warehouses, 28 sorting centres, 59 local package delivery stations, and 65 hubs
for its two-hour “Prime Now” deliveries in 17 countries of the world. As amazon has acquired
whole foods market which add another 431 distribution nodes in that network.
Amazon’s warehouses are divided into 5 storage areas.
1) Library prime storage - Books and magazine
2) Case flow prime storage - Broken case and high demand
3) Pallet prime storage - Full case and high demand
4) Random storage - Smaller items and modern demand
5) Reserve storage - Low demand/irregular shaped products
The location of these warehouses includes:
USA Canada Mexico
Brazil UK Germany
France Italy Spain
Czech Republic Poland Slovakia
China Singapore Japan
India Australia

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Pricing Strategy
The minimum Order can be place on amazon is 25$. It was 35$ but when Walmart come up
with same strategy then amazon reduce the price limit. Special prices are offered on sometimes
in weekends, events, festivals. The prices become very low in these days and the selling ratio
also become at its peak. Some of the major pricing strategies of Amazon are:
 Amazon's strategy is to frequently lower prices until they beat competitors for all
products. No matter in which country they are targeting and what their competitors
does, amazon always prefer to provide a high value to customers than competitors.
 Amazon target different geographical areas by applying different pricing strategies.
It means products prices charge according to geographical area. Currency also
matters a lot.
 There are some products which are high demanding by customers like electronics,
toys & games. Company charge competitive prices in these products and their most
expensive prices fall into their less favourable categories, such as automotive parts.
It means company take eye on its most selling products.
Amazon is competing with the giant retailers of the world in retail industry. It provides 12%
cheaper products on average than Target corporation and 16% cheaper than Toys R. These are
the direct competitors of amazon.
Major competitors
Amazon operates in three general segments: Media, Electronics, and other Merchandise.
1. In the media segment, Amazon competes with:
eBay, Netflix, Time Warner Cable, Apple, Google, Media producer Liberty Interactive
(QVCB).
2. Amazon has several competitors in the electronics and general merchandise segment,
many of which are brick and mortar rivals including:
Best Buy, Family Dollar, RadioShack, Staples, Target, Walmart, Sears, Big Lots, Delia.
Its online competition in the electronics and general merchandise segment includes
Alibaba Group, Overstock.com, Flipkart, PCM, Vipshop Holdings, JD.com, and
Wayfair Inc.
3. In the other operating segment, Amazon competes with several of the world's largest
companies including CDW, PC Connection, Insight Enterprises, Google, Oracle,
Accenture and salesforce.com among others.
Future plans
Amazon is always planning to provide customers a different and more convenient ways of
shopping, provide them all kinds of products which customers desire. For these purposes,
amazon is searching and innovating more and more and they are involving their customers in
the decision making processes for future planning.

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Below are some of the most prominent future plans of Amazon.
Amazon CEO said that “At some point in the near future, 85% of the world’s products will be
available on Amazon” This is the main goal that Bezos is marching of.
Amazon will provide free internet in some areas of different countries for the expansion of
business.
Amazon has announced to build its second headquarter in Washington of worth 5 billion
dollars.
Amazon is going to start Drone delivery within 30 minutes. Many experiments have been taken
and now they are about to launching this service.
In future, Amazon is going to change the way of shipping, packing and many other activities.
They are planning to reduce the work force by humans. Robots will be used for alternative.
Amazon has target to become a 2nd biggest retail store in the world, by 2020 and they are on
the right way to achieve it.

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Mind blowing facts of amazon
1. CEO and founder of Jeff Bezos is now the richest man in the world net worth more than
100 billion dollars.
2. Soon, 85% of the world’s products will be available on Amazon.
3. Last year, when amazon website went down for 49 minutes, the company missed sales
of nearly $5.7million dollars.
4. Amazon owns 10 percent of North American E-Commerce. Office Depot, Stapes,
Apple, Dell, Walmart, Sears, and Liberty all own another 10 percent of the market, the
same size as Amazon. That leaves 1,000+ retailers to all fight for the remaining 80
percent.
5. Amazon's warehouses have more square footage than 700 Madison Square Gardens and
could hold more water than 10,000 Olympic Pools.
6. On prime day, the company sold 140 million products worldwide in 2017.
7. The person who have $100 of IPO, got profit of $63990 on the prime day sales.
8. Amazon's product selection has expanded by 235 million in the past 16 months. That
an extraordinary average of 485 thousand new products per day.
9. On the peak day, Nov. 26, customers ordered more than 26.5 million items worldwide
across all product categories, which is a record-breaking 306 items per second. Amazon
customers purchased more than one toy per second on mobile devices.
10. Look at the growth of amazon: of every additional $1 Americans spent online in 2015,
his captured 51 cents. It helps that 25% of American households now belong to the
Amazon Prime membership scheme. By 2020 it will be at highest peak, at least half of
American households will subscribe to it.
11. When come to the shipments, that number still pales in comparison to the 28 million
packages that UPS has deliver on Thursday, December 20, 2016 its own busiest day of
the year. On an average day, UPS handles 15.8 million packages. FedEx, by contrast,
averages north of 3.4 million packages per day.
12. Amazon make $1084 per second whole year, the highest as compared to other
companies.

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References
www.amazon.com
www.wikipedia.con
www.businessinsider.com
www.forbes.com
www.qz.com
www.theinnovationenterprise.com