12 - Amazon.com1 AMAZON CAN BE ONE OF THE MOST SUCCESSFUL...

Amazon.com
1
“A
MAZON CAN BE ONE OF THE MOST SUCCESSFUL COMPANIES ALL
OVER THE WORLD
. R
ISKS ARE BIG
,
BUT PROFITABILITY CAN BE
ALSO BIG
”
Morgan Stanley Dean Witter
I
NTRODUCTION
Amazon.Com is a leading online retailer company, offering for sale different
items such as books, music, DVDs, videos, toys, electronics, software, video games
and home improvement products serving almost 22.5 million customers over 150
different countries. This company was founded in July 1995 by Jeff Bezos in the state
of Washington USA. Jeff Bezos now 37 years old, received his BS in Electrical
Engineering and Computer Science from Princeton University. His professional career
started at Bankers Trust Company in 1988, where he became Vice President in
February 1990. At the end of the same year he moved to D.E. Shaw & Co. a Wall
Street investment firm, becoming Senior Vice President in 1992. In those early years
for the Internet retail business, Mr. Bezos noticed an important opportunity on the
online commerce. He made a list of possible products that could be sold on line,
including books, magazines, music, among others and finally he decided to start
selling books. The main reasons of his choice were because there are more books to
sell than music titles and also because the book publishing industry is more accessible
than the music industry, mainly controlled by half a dozen of big record companies.
With a dream in hand he quitted his job in June 1994 and moved to the West, choosing
Seattle as starting point because its proximity to a major book distributor, Ingram’s
Warehouse in Oregon. This is how the company that took its name from the river with
the biggest water flow of the world started in a garage downtown Seattle with four
employees, to be the biggest flow of e-commerce book retail.
P
RODUCTS AND
S
ERVICES
Amazon.com business is in some sense simpler than the usual book retailer
firm. No investment in costly point of sales, small inventories, better client support,
no long cues to pay or return books,… These are some of the advantages with respect
to the “real world” commerce activities. In addition to this, customers can search at
home a database of millions books, CD’s, DVDs, videos, software, video games, lawn
products and even a pan for your kitchen. If you find the item you want, just add it to
the shopping cart and then is needed to fill out an online form to specify the type of
payment, shipment characteristics and even if it’s a gift, the type and color of
wrapping paper. Also today it is possible to access used and collectible items through
1 This case study has been written by Raul González, with the collaboration of
Oriol Amat, Department of Economics and Business, Universitat Pompeu Fabra
(Barcelona).
1

their zShops and Amazon Commerce Network (ACN) 2 or going to Amazon Auctions
or sothebys.amazon.com.