Retail Strategies and Analyses for Amazon and Ebay

Amazon.com was founded as an online bookstore in July, 1995 and went public in May 1997. In June, 1998 Amazon.com launched its music store. Since then Amazon.com has become the most prominent Internet retailer. Over time Amazon.com has added several products including electronics, health and beauty products, house wares, kitchenware’s, music, tools, toys, videos, and several services such as auctions, 1-Click ordering, and zShops. Amazon.com has expanded nationally and internationally and now operates several customer service and distribution centers in the United States and international web sites that

1. If the price is set low and Amazon can not meet the break-even point, then Amazon will undertake the great financial burden and might even lead to bankruptcy.

In 1999, Amazon became a merchant platform by introducing zShop, “a new service that allows anyone to sell merchandise through its website”. (Moore, 1999) It not only creates extra revenue from the $9.99 monthly subscription fee from sellers but also “60 cents per transaction for payments made with 1-Click, as well as 4.75 percent of the final sale”. (Moore, 1999)

Amazon has earned a great reputation in customer service for allowing customers to shop without face to face, avoiding talking to a customer’s service representative agent on the phone, everything it done online. Sales clerk does not exist, everything is ordered with a click of the mouse, and arrives extremenely quick in the mail (Cohen, 2009). Amazon at interval has gotten involved with the customers when they can have too. According to Green, H. (2009), “Amazon stands out most markedly from other companies, and helps explain how the company earned the No. 1 spot on Business Week’s customer service ranking this year”( para. 1).

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 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).

There are mainly 4 priorities of Amazon when they established their online venture. The four priorities are convenience, selection, price, and customer service. E-business gave the Amazon a major advantage i.e it opens for 24 hrs or anyone can buy anything 24hrs a day. Various functions such as reviews, e-mail notifications , product recommendations, etc are given by Amazon in their website. Wide range of products are also provided by Amazon. They have an inventory of millions of products at a time.

In recent times, Amazon has had image problems arising from being publicly accused of tax avoidance and this has created negative press and scrutiny upon them, which in the long run can damage the appearance of the organization. They are also accused of having poor working standards in their warehouses and the safety conditions in which their employees are expected to work are not up to proper standards.

Amazon.com spent over $400 million on digital business infrastructure that linked nine distribution centers and six customer service centers throughout the U.S., Europe, and Asia during 1998 and 1999. Due to the company’s larger customer base from expansion with the infrastructure in place Amazon.com will earn profits quickly. The digital business infrastructure allowed Amazon.com to cut their cost drastically because they did not have to stock every item. Customers received shipments faster which increased customer loyalty and satisfaction. IT capabilities enabled Amazon.com to cut cost, earn higher profits, and reduce competition by gaining partnerships (Applegate, Austin, Soule, 2009).

Amazon is an American commerce company based in Seattle, Washington, USA. The company used to be only a bookstore, but now it diversified into difference type of products. The goal of Amazon is to provide one stop shop experience where the customer can find everything on Amazon as earth’s biggest selection (Warman 2012). Amazon operates as a pure internet retailers that does not have retail store at all while the delivery will be done through Amazon’s networks of distribution centres. This operation makes the company is able to provide wider range of goods and lower cost of products with high quality. Moreover, it is also increase customer satisfaction as it supports customer convenience.

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Retailers have adapted to the online marketplace out of necessity and opportunity. The great recession placed many retail companies in financial hardship and while some failed, others innovated and became some of the largest companies in America such as Amazon. A recent trend is consumers are buying more products online than ever before. As a consumer, I enjoy shopping in the convenience of my home and having the items delivered to my doorstep in 48 hours or less. Global internet access continues to increase, with mobile devices and affordable internet for the home, consumers will continue to shift and buy products online rather than in retail brick and mortar locations. Online sales in the United States have increased over 250% in the last ten years, accomplishing $250.0 billion in 2012 (Tehrani, 2014). Therefore, Amazon is in a solid market position to capitalize on the future trends and booming ecommerce

The company has many strengths. First, Amazon is the world’s leading online retailer. According to the 2016 Annual Report, Amazon had total net sales of US $135, 987 million in 2016. These total net sales include three segments which are North America, International, and AWS. Second, in comparison to many companies, Amazon has a superior logistics and distribution system, which allows the company to actualize improved customer fulfillment. Third, with its prolonged strategic drive on low-cost, differentiation, and focus, Amazon offers a wide range of product at low prices to customers. Fourth, Amazon enjoys global recognition from its customers. As stated earlier, Amazon built a strong brand in very little time. Finally, the

Amazon operates using a web-based platform to sell books.  The web-based model targets a global market, has reduced overhead costs and a shorter operating cycle as compared to brick and mortar businesses such as Barnes & Noble and Borders. Amazon’s online model has a superior inventory

Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.