E-commerceG1-Case3 Amazon

““Amazon.com named after theAmazon.com named after the

BIGGEST river in the worldBIGGEST river in the world””

We see our customers

as invited guests to a

party, and we are the

hosts. It's our job

every day to make

every important

aspect of the customer

experience a little bit

better.

Jeff Bezos

INN

OV

AT

IOIN

NO

VA

TIO

NN

AMAZONAMAZONHistoryHistory

History

• Founded : 1994 Seattle Washington, U.S.

Founder : Jeff Bezos

• “Anything they might want to buy on

internet”.

• Web's most successful pure online retailer.

• “Internet was evolutionary , only the big early

on company would survive”

Jeff Bezos.

• Started with selling books, CDs and DVDs.

HistoryHistory

• Pass through explosive early growth, huge

loss, then on to profitability

• First profitable quarter in fall 2002, first

profitable year in 2003.

• Face a big fluctuation from 1999-2008.

• Stock price swing from $6 - $105 per share.

• Sites in US, Japan Germany, UK, French and

Canada.

HistoryHistory

• In 2002, Diversified to other products.

• Objective

“Offer the Earth’s biggest selection and the

be Earth’s most customer-centric company

where customer can find and discovery

anything they may want to buy.”

HistoryHistory

• Path to Success

� Lowest Price.

� Best Selection.

� Convenience.

• Millions of Unique new ,used and collectible

items

• 11 Major Categories of Goods

�Feature Rich content

�User's review content

�Fast , Reliable

�Ease of use

““To be Shopping PortalTo be Shopping Portal””

• Provide online shop who rents Space from

Amazon

• Bring user to other places on Web , if things

are not found on Amazon.

• Competition

• Market Place : Ebay

• Portal : Yahoo ,MSN and Google.

AMAZONAMAZONVISION VISION

STATEMENTSTATEMENT

Vision

To be earth's most

customer centric company; to build a

place where people

can come to find and

discover anything

they might want to

buy online

AMAZONAMAZONBUSINESS BUSINESS

MODELMODEL

1994 1994 -- 20002000

• From Brick-and-Mortar to E-tailer

• 1 Click Shopping

• From 1 department to 10 departments

• Acquire many other business company

– IMDB

– Alexa

– A9

20032003

2003

A9.com > Product Search

• Customer-Focused

• Search Inside The Book

Clickriver Ads > Advertising Network

• Interface like Google Adwords

• Matching Services to Content

20062006

2006

March introduces Amazon Web Services

• Simple Storage Service (S3)

• Elastic Compute Cloud (EC2)

• Simple Queue Service (SQS)

• SimpleDB

• Flexible Payments Services (FPS)

• Amazon Mechanical Turk

Model I :Model I :RETAILERRETAILER

Model I : RetailerModel I : Retailer

Offer customer 3 things

• Lowest price

• Best selection

• Convenience


Offer new, used, collectible

item of 11 category :

• Books

• Movies, Music & Game

• Digital Downloads

• Computers and Office

• Electronic


Offer new, used, collectible

item of 11 category :

• Home and Garden

• Grocery, Health and Beauty

• Toys

• Kids and Baby

• Sport and Outdoors

• Tools, Auto and Industrial


• Cookies

• Recommend


• Search Engine

• Information


• Customer Review

• Ranking


• Free Shipping over $25 (for some item)

• Amazon Prime : paid $79 Annual Fee to get

2-Day shipping free.

• Traceable Order

Model II :Model II :MARKET CREATORMARKET CREATOR

Model II : Market CreatorModel II : Market Creator

Merchant service

Enable 3rd parties to integrate their products into

Amazon’s web site and use Amazon’s customer

technologies (started on 2002)

• Amazon Market place (individual and small

business)

• Merchants@ program (large and branded

business)


• Amazon Market place

– Only product in Amazon’s category


Amazon Market placeAmazon Market place

- Merchant must register

- Merchant’s product will show on Amazon’s site

- Amazon Collect Money (include Shipping cost)

- Merchant ship product to customer (Amazon will

support transaction cost)

- Amazon take $0.99 + referral fee 6%-15%


• Merchants@ program


• Merchants@ program

– Paid $39.99 per month + Referral Fee

– Merchant Upload their Inventory

Model III :Model III :SERVICE PROVIDERSERVICE PROVIDER

Model III : Service ProviderModel III : Service Provider

• Fulfillment By Amazon (FBA)

• Payment Solution

Fulfillment by Amazon Fulfillment by Amazon ((FBAFBA))

• Store your products in Amazon's fulfillment

centers, and we directly pack, ship, and

provide customer service for these products

Fulfillment by Amazon Fulfillment by Amazon ((FBAFBA))

• There are no additional set-up charges or

subscription fees

• Fulfillment fees vary depending on the type of

item (Media or non-media), its dimensions

and weight, and the shipping method used

Payment SolutionPayment Solution

• Checkout by Amazon

• Amazon Simple Pay

• Amazon Flexible Payments Service (FPS)

Checkout by Amazon™

• Use shipping addresses and payment methods

stored in their Amazon.com accounts

• Pricing : Fees are assessed on a per-

transaction basis. There are no start-up

charges, monthly charges, hidden fees, or

long-term contracts

Checkout by Amazon™

• Use Amazon's 1-Click® and other tools for

sales and post-sales activities

• Express Lane Checkout Experience

• 1-Click® Checkout Experience

• Amazon PayPhrase Experience

• Standard Checkout Experience

11--ClickClick®® Checkout Experience Checkout Experience

Amazon Simple PayAmazon Simple Pay

• Use shipping addresses and payment methods

stored in their Amazon.com accounts

• Pricing : Fees are assessed on a per-

transaction basis. There are no start-up

charges, monthly charges, hidden fees, or

long-term contracts

• Payment occurred at Amazon Website

Amazon Simple PayAmazon Simple Pay

• Amazon Simple Pay Standard

• Amazon Simple Pay Subscriptions

• Amazon Simple Pay Donations

• Amazon Simple Pay Marketplace

Amazon Simple Pay StandardAmazon Simple Pay Standard

Amazon Flexible Payments Service Amazon Flexible Payments Service ((FPS)FPS)

• Offers developers unmatched flexibility in

how they can structure payment instructions.

These instructions impose conditions and

constraints on money movements and can be

set by both senders and receivers of funds

Amazon Flexible Payments Service Amazon Flexible Payments Service ((FPS)FPS)

• Accept one time payments on your website

• Execute periodic or delayed payment features

required by subscription

• Facilitate transactions between a buyer and a

third party seller

Model IV :Model IV :ADVERTISEMENTADVERTISEMENT

Model IV : AdvertisementModel IV : Advertisement

• Product Ads on Amazon

• Advertise with Amazon

• Advertising for Service Providers

Product Ads on AmazonProduct Ads on Amazon

• Product Ads is an

advertising program

that puts your products

in front of millions of

Amazon.com

customers.As a seller,

you simply upload your

product catalog and set

your cost-per-click bids

and daily budget.

Advertise with Advertise with AmazonAmazon

• Advertise your

products through online product ads,

online display

advertising or offline package inserts.

• List your services

next to related

products

Advertising for Service ProvidersAdvertising for Service Providers

• Clickriver Ads offers the unique opportunity to

promote your services

Model V :Model V :WEB SERVICEWEB SERVICE

Model V : Web ServiceModel V : Web Service

• To utilized the $s billon Amazon’s technology

– Simple Storage Service (S3)

– Elastic Computer Cloud (EC2)

– Simple Queue Service (SQS)

– SimpleDB



• WebStore

– Create Web using Amazon’s Framework

Model VI :Model VI :AFFILIATEAFFILIATE

Model VI : AffiliateModel VI : Affiliate

• Amazon Mechanical Turk

– Provide a marketplace for work that requires

human intelligence

– offers access to a virtual community of workers

that are available to help you accomplish your

business goals. A robust set of APIs and command

line tools enable you to programmatically

distribute tasks that require human intelligence to

a widely distributed, on-demand workforce

AMAZONAMAZONBUSINESS

PERFORMANCE

Business PerformanceBusiness Performance

• revenue primary from selling products

– 65% from media sales like books, CDs, DVDs and music from streaming service.

– In 2007, 62% of its revenue ($9.2 billion) is from the sales of media, only 37% from electronics and other general merchandise.

– Still not yet achieved the product diversification of offline mass-market merchants such as Wal-mart, Costco or Sears.

• International Organization

– In 2007, $6.7 billion from Amazon is 45% of $14.835 Billon of gross revenue offshore, which grew up by 39% in sales.

AMAZONAMAZONBUSINESS STRATEGY

Business StrategyBusiness Strategy

• Maximize growth in sales volume

– free shipping for Amazon’s retail (increase order

size by 25%)

– shorter order fulfillment times

– Accelerated shipping

– greater product selection

– Amazon Market place and Merchants@ program.

– Amazon’s syndicated stores program

Business StrategyBusiness Strategy

• cutting prices to the bare bone

– optimized the location of storing goods, size of

shipment

– consolidate order into larger batches

– use “Postal injection” (trucked package to U.S

Postal system center)

AMAZONAMAZONCOMPETITION

CompetitorsCompetitors

• E-tailer Dimension

• Web Portal Dimension

EE--tailer Dimensiontailer Dimension

• Direct - Online

– Clicks: eBay.com, buy.com

– Bricks-and-clicks: Wal-Mart, Target

• Indirect - Offline

– Retailers (Physical stores)

Web Portal DimensionWeb Portal Dimension

• Yahoo

• MSN

• Google

• etc.

AMAZONAMAZONSOCIAL AND

LEGAL CHALLENGE

Lawsuit Lawsuit –– Toys Toys ““RR”” usus

• Toy “R” us sued Amazon over what it claimed

was its exclusive right to sell toys on Amazon

• Toy “R” us claimed 4000 items is slipped

through the cracks.

• Toy “R” us won suit against Amazon

Variable Pricing

• Charges different prices for the same

products depending on who visits, and that's

hacking off some loyal customers

• This leads to creating unequal !!

10? 20? 15? 17?

AMAZONAMAZONFINANCIAL ANALYSIS

Income Statement

• Year over year, Amazon.com Inc. has been able to grow their bottom line from $476.0M to $645.0M primarily through revenue growth ($14.8B to $19.2B).

• Offer best services such as FREE Super Saver Shipping, Fast delivery

• Offer the Earth’s Biggest Selection and to be Earth’s most customer-centric company where customers can find and discover anything they may want to buy

• Heavily on affiliates and third party merchants to drive sales (no increase in marketing, administrative cost)

• For while the costs associated with cost of goods, Selling General & Admin Expense and income tax all increased as a percentage of sales but eliminating marketing in offline magazines and TV.

• Interest expense also decreased as a result of decreasing in Long Term Debt

• The growth in top line revenues contributed enough to still see net income improve

Income Statement

Income Statement - Quarterly

Drop in Q2 2009 came from payment to Toys

"R" Us $51 million to settle a lawsuit filed by the

toy retailer in May 2004.

Income Statement

Balance Sheet

• This company's debt to total capital ratio, at 19.90%, is in-line with the Internet and Catalog Retail industry's norm

• Operating Profits are more than adequate to service the debt.

• Amazon stretched out its bill-payment resulted in accounts-payable days have risen from 49.25 days in 2003 to 59 in 2008 before jumping to an average of 64.6 so far in 2009.

• Free cash flow has grown to $1.36 billion in 2008 from $346 million in 2003.

Balance Sheet

The stock has been erratic over this recent 10 years; however, it seems to

be a upward trend

AMAZONAMAZONFUTURE PROSPECTS

Business Model InnovationBusiness Model Innovation

“The key to sustained success is

business model innovation”

Amazon GiverAmazon Giver

Amazon GrapevineAmazon Grapevine

Amazon Giver & Grapevine Amazon Giver & Grapevine -- BenefitsBenefits

•See the Amazon wish list of your friends via

Facebook

•See the Amazon activities of your friends via

Facebook, e.g. Product review, rating, etc.

•Currently, It’s no longer

Facebook and AWSFacebook and AWS

SanptellSanptell

Snaptell - "Accumulated Signed Gradient" (ASG).

Snaptell Snaptell -- BenefitsBenefits

• New way of Product Search

• Easy to find product you see

KindleKindle

• E-book reader

Kindle Kindle -- BenefitsBenefits

• Pricing Advantage (Lower Price)

• Immediate Delivery Book

• Handy

Amazon Affiliate ProgramAmazon Affiliate Program

Amazon Affiliate Program Amazon Affiliate Program -- BenefitsBenefits

• Earn commission up to 15%

• Expand channels around the world

• Similar to Google Adsense

Affiliate ProgramAffiliate Program

“The answer, we believe, is that Jeff Bezos

understands that the key to sustained success is

business model innovation”

Josh Suskewicz,

INNOSIGHT

Date post:	08-May-2015
Category:	Technology
Upload:	newnwan
View:	4,118 times
Download:	0 times

E-commerceG1-Case3 Amazon

Technology