Amazon.Com Case Study

Amazon.Com Case Study

recommend students studying Amazon in my books checkout the latest Amazon revenue and business strategies from their SEC filings. The annual filings to give a great summary of eBay business and revenue models.

E-consultancy also has a useful news feed which I use to update my Amazon case study. This gives summaries of acquisitions, new technologies or revenue growth.

SEC is the Securities and Exchange Commission (SEC) which is a government agency for which companies have to submit an open evaluation of their business models and marketplace conditions.

2008 Update on Amazon logistics

Some interesting figures on the site loads and fulfillment that Amazon needs to manage from my friends at Internet retailing:

"Amazon.com has finished its 13th Christmas season and the results are the best ever season, with its busiest day being December 10. On that day, Amazon customers ordered more than 5.4 million items, which is 62.5 items per second.

Amazon Worldwide 2007 (Including results for the US, UK, Germany, France, Japan and Canada) shipped more than 99 percent of orders in time to meet holiday deadlines worldwide and on the peak day this season, Amazon's worldwide fulfilment network shipped over 3.9 million units to over 200 countries.

Amazon.co.uk received orders for over 950,000 items on its busiest day in the run up to Christmas this year – at a rate of 11 orders per second – exceeding all previous sales records. At its busiest, Amazon.co.uk shipped over 700,000 units in one 24 hour period, which represents 375 tonnes of goods. That means that on average, a delivery truck was leaving an Amazon.co.uk distribution centre once every seven minutes."

Amazon Case Study Context

Why a case study on Amazon? Surely everyone knows about who Amazon are and what they do? Yes, well that's maybe true, but this case goes beyond the surface to review some of the ‘insider secrets' of Amazon's success.

Like eBay, Amazon.com was born in 1995. The name reflected the vision of Jeff Bezos, to produce a large scale phenomenon like the Amazon river. This ambition has proved justified since just 8 years later, Amazon passed the $5 billion sales mark – it took Wal-Mart 20 years to achieve this.

By 2008 Amazon was a global brand with other 76 million active customers accounts and order fulfillment to more than 200 countries. Despite this volume of sales, at December 31, 2007 Amazon employed approximately 17,000 full-time and part-time employees.

In September 2007, it launched Amazon MP3, a la carte DRM-free MP3 music downloads, which now includes over 3.1 million songs from more than 270,000 artists.

Amazon Vision & strategy

In their 2008 SEC filing, Amazon describe the vision of their business as to:

"Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise."

The vision is to offer Earth's biggest selection and to be Earth's most customer-centric company. Consider how these core marketing messages summarising the Amazon online value proposition are communicated both on-site and through offline communications.

Of course, achieving customer loyalty and repeat purchases has been key to Amazon's success. Many dot-coms failed because they succeeded in achieving awareness, but not loyalty. Amazon achieved both. In their SEC filing they stress how they seek to achieve this. They say:

"We work to earn repeat purchases by providing easy-to-use functionality, fast and reliable fulfillment, timely customer service, feature rich content, and a trusted transaction environment.

Key features of our websites include editorial and customer reviews; manufacturer product information; Web pages tailored to individual preferences, such as recommendations and notifications; 1-Click® technology; secure payment systems; image uploads; searching on our websites as well as the Internet; browsing; and the ability to view selected interior pages and citations, and search the entire contents of many of the books we offer with our "Look Inside the Book" and "Search Inside the Book" features. Our community of online customers also creates feature-rich content, including product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby registries."

In practice, as is the practice for many online retailers, the lowest prices are for the most popular products, with less