Amazon.Com’s Inventory Management

Jeff Bezo’s began Amazon in his garage in July 1995 with three Sun workstations setting on wooden doors for tables and extension cords running from everywhere (Academy of Achievement, 2010). Right from the beginning he was a visionary leaving his well paying job as a senior vice president with D. E. Shaw to begin Amazon.com (Academy of Achievement, 2010). Being the visionary that he is he saw an opportunity prompted by the huge growth rate of internet use in a single year and ran with it never looking back. Jeff realized that the internet had “no real commerce to speak of” so he began researching possible businesses (Academy of Achievement, 2010). “After reviewing 20 mail order businesses and deciding which

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

Amazon intended to benefit from cross selling on the basis that it already has a loyal installed base in place. (Krishnamurthy, 2004) Amazon also benefited from economies of scope as its basic infrastructure is already in place and highly scalable.

Amazon.com was founded in 1994, it started by selling books online. As it grew, the company started offering various products and services. Some goods include: DVDs, videos, electronics, camera and photography, clothing apparels, shoes, and so forth. Other retailers have merged with Amazon.com to offer diverse quality of items based on different degrees of usage, such as new, refurbished, and used items. The company 's headquarter is in Seattle, Washington. It has six global websites that serves customers that are based in the United States, the United Kingdom, Germany, France, Canada, and Japan. Their website features: e-mail order verification, customer review on products, and one-click shopping.

Amazon.com Inc. was initiated by Jeff Bezos in 1994 after realizing the rapid rate at which the internet and websites were growing in popularity among business organizations and individuals. In 1995, the company started operating its website for selling books, videos, compact discs, computer software and computer hardware before being incorporated in1996 as an e-commerce company (Reuters, 2015). Apparently, the company offers may products and services for sale; these products include merchandise for resale products offered by third parties. In this regard the

Getting into this enormous Warehousing infrastructure, four main elements can be explained to picture how things work in an Internet retailer; Inventory Segmentation, Order Profiling / Item Activity, Distribution Center Inbound and Order Fulfillment.

One of the companies that exploits opportunities and business ventures to create growth and sustainability is Amazon, Inc. Amazon was founded in 1994 and since then it has opted to take its business online and thus develop a global strategy that has paid off and turned the company into a technological business hub that serves consumers by offering an assortment of products and services in a noteworthy customer service. These strategies have made Amazon one of the leading online retailers with a revenue of US$ 88.988 billion as of 2014. This paper thus seeks to describe Amazon’s grand strategies of product development, market development, and concentration as part of its long-term growth strategy.

Amazon focuses on global reach, putting customer first,, and extensive selection of products through its vision which is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory 2016).

The basic Amazon sales channel is the web store front- end which serves as their core business. Customers go to the Amazon.com website, browse products, and place orders. Amazon is responsible for all front-end customer relationships and back-end logistics in this model. Once an order is placed, Amazon decides which internal distribution center or drop shipper should be responsible for shipping the order to the customers. After that, Amazon will responsible for coordinating the fulfillment of the order. When products are sourced from its internal distribution centers, then Amazon start to picks, packs, and ships the order. When products are sourced from a drop shipper, such like a book distributor, the distributor packages the products by using the Amazon box delivers it to the customer (Maltz et al., 2004). This model requires Amazon to maintain or purchase inventory for immediate selling. In this model, Amazon owns the customer relationship, provides the technology, owns or purchases the inventory, and executes the logistics as well.

The company understood the high importance of smooth and easy order process for their customers. Any obstacles could result in potential customers not being able to purchase the product and eventually leaving the website, which would lead to Amazon not making profit.

Earlier, amazon don’t want to invest in the warehouses. But to do business, they had to invest in warehouses. So, they decided to invest in the warehouses. It was a costly decision. They had to spend $50 million for a warehouse and for getting that money, they issue bonds. Earlier, Amazon rate of return was only 0.25 % as compared to 30% for many online retailers. Amazon’s warehouses store millions of products. Their warehouses are also computerised. After Amazon faced lots of problems during catering the demands of customers during holiday sessions of 1999, they decided to change the inventories processes. They did it by changing the layouts of the warehouses. It also helped them to locate and ship products to

Every company has their own supply chain in order to sort or produce goods. However, the company needs to manage supply chain to maximize its highest benefits. By having effective supply chain management, the company can ensure that the right product or service will be available at the time to the right place and at the right price (Kamal 2007). Amazon is one of the companies that have best supply chain practices in order to respond high level of responsiveness for the customers. Thereby, this paper explains about Amazon Company, analysis of Amazon’s supply chain, recommendations and barriers to implement will be discussed.

AMZN has competed on selection with traditional retailers since its inception. AMZN is able to support this selection through its multi-tier inventory network. The following is a description of the three tiers or echelons that comprise AMZN’s inventory network. The website www.amazon.com is the consumer interface and owns the

Third party merchants. Amazon has a huge number of merchants selling their goods using their platform. Amazon provides fulfillment services for many of these companies and receives high gross margins from these merchant units.

How Amazon.com manages inventory. What are the company's unique concerns? How does the company address these concerns?