Value Proposition Of Amazon

1054 Words5 Pages
Supply Chain of Amazon:

Value Proposition
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.

Inventory Management
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.
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They able to do it. They manage the warehouse very efficiently. Amazon decide carefully which products to buy, from whom to buy and from where to buy. They dicided to buy its products directly from publishers/producer rather than distributers. With its vendors, Amazon also hold a good relationship. Hence, it helped them to extract good deals from them. Amazon also refined its software. The new refined software will take inventory only according to the demand. Amazon also tried to cut down its expenses. Amazon also decide to outsource all the activities other than their core activities. They take the help of third parties to inventory shipment purposes. They did it to concentrate more on their core activities. It partnered with many companies for shipping the inventory They save lots of expenses related to filling and shipping
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