Paper Example on Amazon: The Largest Online Retailer, Growing From $511K to $61B

Introduction

Amazon is an online store which started in 1995, and it has evolved to become the largest online retailer in the globe. The company sells electronics, DVDs, housewares, toys, tolls, Kindle Fire tablet, apparel, and the Kindle e-book reader. Amazons income has continued to grow due to its diverse market which made its revenue to increase from $511,000 in 1995 to $61 billion in 2012. The direct to consumer model has made the company continue growing since the online platforms help the selection process by the clients to be quick and convenient. Through keeping of an inventor, the company ensured that their clients were able to pay for the goods before paying the suppliers hence creating a negative operating cash flow cycle. Jeff Bezos was named the "Person of the Year" after the time magazine noticed the organizations' success in online shopping. Therefore, the success of this company made the management expand and open operating subsidiaries in the ten abroad countries. The subsidiaries which were opened in Japan and the United Kingdom ended up performing better than those in China, Italy, Brazil, Germany, and other countries.

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The Online Retailing Industry

This industry developed after consumers had enough knowledge about the online market and internet use was more prevalent. The development of PayPal as the method of an online payment made online shopping secure, and clients could pay for their goods more conveniently. After the online industry outperformed the brick and mortar stores, it was perceived that the industry could grow faster due to the high purchase rate among the Americans. Amazon was among the top five online retailing organizations in 2012, and its sales were 17 percent of the United States online auction market and e-commerce. The Amazon developed a platform where the online merchants could transact through their website thus making the Amazon receive a commission on the products and services sold through their website. This action led to an increase in the products which were available on the Amazon platform hence contributing to 30 percent of the Amazons sales in 2013. Therefore, Amazon faced competition from the traditional retailers who had secured relationships with the significant supplier which posed a challenge to the online market.

Amazon's Portfolio of the Products and Services

The Amazon products were divided into consumer electronics, retail goods, and digital contents. The retail goods were music C.D.s and DVDs, books, kitchen items, beauty products, groceries, and clothing. The competitors in the online market were Wal-Mart and eBay's Half.com. The Amazon outperformed these organizations because of its quality stock thus increasing its growth. The consumer electronics included the Amazon Kindle which was the e-book reader that helped the clients to access the titles for affordable prices and without much struggle. The digital content by the Amazon Company was the MP3 files and the e-books.

On the other hand, the services provided by the Amazon was the Amazon Prime which helped its members to view the Amazon instant videos, discounted one-day shipping rates, and the free two-day shipping. The members were also allowed to borrow the books for free if they had access to the Kindle Owner's Lending Library. In the United States, the customers were allowed to buy and rent films and television shows through the Amazon Instant Video. Other services which were offered by the Amazon were the content production services, Donations, and Amazon publishing.

Global Expansion

Amazon United Kingdom

In October 1998, books were the primary source of income for the Amazon Company. Among the best- selling titles was the Harry Potter series, and it had 6000 percent growth in its sales. Amazon U.K. developed its services and products offering to lead to a significant growth rate. The Amazon U.K. launched Amazon Prime after it was successfully launched in Japan and the United States. The clients were given unlimited free daily delivery during the promotion in the United Kingdom. The company won the various award in 2002 after reaching five million customers through home and customer delivery of services. The competitors in the U.K. market were Tesco, Blackwell UK, and the WHSmith.

Amazon in France and Germany

Amazon obtained an online bookstore in Germany in October 1998. Amazon began with selling books to the Germans and later expanded to games, DVDs, videos and opened the fulfillment and client service centers. In 2000, an online store was opened in France, and it began selling C.D.s, videos, books, DVDs and music. Therefore, the Amazon France expanded to game stores, consumer electronics store, the marketplace, Kindle and the Amazon Prime.

Amazon Japan

The Amazon.co.jp was developed in 2000 to provide 600000 titles in English and 1.1 in Japanese. The Amazon.co.jp was the first Asian language website and the fourth international online store for the Amazon Company. The company experienced a challenge since it sold the Japanese books at a lower price since there were legal restrictions which controlled the deep discounts and the bypassing of the purchasing taxes.