From Bezos’ garage to world domination: the Amazon success story
Amazon – The success story of the century
The world’s largest marketplace is considered to be one of the Big Four technology companies along with Google, Apple, and Facebook. It’s the second largest technology company by revenue and the place where you and 1.761.784 sellers have products listed for sale.
From an online book store to a Trillion dollar company
You wouldn’t believe that this immense corporation has started out as an online book store based in a garage. Understanding Amazon’s successful history should work as a booster for any small business or startup owner because there is always hope that one’s idea is a billion (yes, billion) dollar one.
The company was founded by Jeff Bezos in 1994, when he left his employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and moved to Seattle, Washington, where he began to work on a business plan for what would become Amazon.com. Bezos initially incorporated the company in Washington State with the name Cadabra, Inc., but he later changed the name to Amazon.com, Inc. after a lawyer misheard its original name as “cadaver”. In its early days, the company was operated out of the garage of Bezos’s house on Northeast 28th Street in Bellevue, Washington.
Bezos settled for “Amazon” because it was a place that was “exotic and different”, just as he had envisioned for his Internet enterprise. The Amazon River, he noted, is the biggest river in the world, and he planned to make his store the biggest bookstore in the world.
Oh and keep in mind that a name that began with “A” was preferred because it would probably be at the top of an alphabetized list. This could help you in your future business endeavors as well!
Even after the company built warehouses to store inventory, making it a business with real revenue and real assets, plenty of investors wrote Amazon off as another dot-com fever dream, destined to be gobbled up or wiped out by Borders and Barnes & Noble. While the competition filed for bankruptcy protection, Amazon has moved into almost every imaginable type of product, media, and service. In 1998 the online book store started selling CDs and DVDs, with the music section including 125.000 titles, so a lot more than any average physical music store.
Amazon also allowed shoppers to listen to song clips as well as view recommendations matched to their mood so this was the first step towards personalized shopping.
Data collection and personalizing services were the main reason behind Amazon – Bezos continued by copyrighting the ability to purchase an item online with the click of a mouse. Called 1-Click, the technology gave the company an early advantage by prompting customers to buy more and allowing the company to collect their data.
A year later, near the end of 1999, Amazon started letting third-party sellers sell used merchandise in zShops (now known as the Marketplace). That sparked a huge increase in the volume of transactions on Amazon.com. Over the first four months, a quarter of a million customers bought something using the service. Time Magazine named Bezos “Person of the Year”, naming him “the king of cyber-commerce.” He received the title at age 35 making him the fourth-youngest recipient of the distinction.
The company was constantly evolving and opened up to clothing sales as well as magazine subscriptions, electronics, toys, and even kitchenware, as it partnered with several major clothing companies to offer 400 apparel brands in its online store.
After entering the Chinese online market (dominated by Alibaba) in 2004, Bezos announced Amazon Prime, a $79-a-year loyalty program that included free two-day shipping on any order. Now, with more than 100 million members worldwide, Prime is considered one of Amazon’s most valuable assets.
This was the beginning of multiple takeovers, such as Audible, Zappos, Kiva systems and many others, in their attempt to be the go-to platform for shopping by providing excellence and futurism into their products and services.
But the company also managed to be in touch with its roots so in 2015, after being blamed for the decline of independent bookstores across the country, Amazon opened its own physical retail location in Seattle.
The store’s opening was meant to market Amazon’s growing list of electronic devices as much as it is to sell books. Amazon now has 15 bookstores in cities across the United States.
Amazon’s stock price got high enough to make the company briefly worth $1 trillion. It was only the second company to pass that threshold, after Apple reached it earlier that year, and analysts quickly started to predict $2 trillion won’t be too far off in the future. Amazon would also raise the minimum wage to 15$ an hour for over 350.000 workers, regular employees, and seasonal hires.
Today, Amazon accounts for nearly half of online retail sales in 2018, according to eMarketer, and is laying the groundwork for a physical retail business — equipped with labor-saving technologies like cashier-free checkout that has legacy grocery and convenience chains scrambling to catch up. Basically, in its quarter-century existence, Amazon has revolutionized shopping worldwide.
No wonder online sellers prefer Amazon to other online marketplaces! Except in China, where Alibaba owns almost 60% of the market, Amazon has become the place where people buy stuff online, regardless of what. Everything is available on Amazon and shipping is done via dedicated and efficient services which run the business to a profit and size maybe even Bezos hadn’t dreamt of reaching in 1994.
The Amazon success story doesn’t stop here
Jeff Bezos is always looking at ways to improve customer experience – this includes delivery times. Amazon has announced that we will be seeing drone delivery soon – the drones will be able to deliver 5lb packages within a 15-mile radius in 30 minutes. They hope that the drones will reduce the company’s environmental impact by encouraging people to stay home.
The Amazon success story continues with the acquisition of Blue Origin – looks like Jeff Bezos is aiming to shoot at the stars! He has plans to start colonizing the Moon within a decade – how ambitious is that?