Difference between revisions of "Amazon.com"

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'''Amazon.com, Inc.''' is the largest e-commerce company worldwide <ref>[http://www.internetretailer.com/top500/list/ Internet Retailer: The Top 500 List]</ref>. The company is also known for its product line of Amazon Kindle e-book readers, Amazon Kindle Fire tablets, Amazon Web Services cloud computing services, and Amazon Mechanical Turk online marketplace for work. [[Wikipedia:Jeff_Bezos|Jeff Bezos]] founded Amazon.com in 1995 in Seattle, Washington <ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>. Originally, Amazon.com sold a wide array of books, but it has expanded its inventory to products, including CD's, DVD's, electronics, apparel, and almost any other good from A-Z <ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>.
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'''Amazon.com, Inc.''' is the largest e-commerce company worldwide <ref>[http://www.internetretailer.com/top500/list/ Internet Retailer: The Top 500 List]</ref>. The company is also known for its product line of Amazon Kindle e-book readers, Amazon Kindle Fire tablets, Amazon Web Services cloud computing services, and Amazon Mechanical Turk online marketplace for work. [[Wikipedia:Jeff_Bezos|Jeff Bezos]] founded Amazon.com in 1995 in Seattle, Washington <ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>. Originally, Amazon.com sold a wide array of books, but it has expanded its inventory to products, including CD's, DVD's, electronics, apparel, along with almost any other good<ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>.
  
 
==History==
 
==History==
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Jeff Bezos conceptualized Amazon.com in 1994 while working at [[Wikipedia:De_shaw|D.E. Shaw & Co.]], a global investment management corporation. After weighing the pros and cons through a process he described as "regret minimization," he decided to leave D.E. Shaw in order to pursue his urge to found an online book selling company. Bezos believed e-commerce would become a very profitable business because the Supreme Court had recently decided online sales are not taxable. In addition, he believed online sales would follow a long-tail distribution, allowing Amazon.com to sell and carry books that would not be economical for a physical store to carry. Bezos sold his first book from his garage in 1995 <ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>.
 
Jeff Bezos conceptualized Amazon.com in 1994 while working at [[Wikipedia:De_shaw|D.E. Shaw & Co.]], a global investment management corporation. After weighing the pros and cons through a process he described as "regret minimization," he decided to leave D.E. Shaw in order to pursue his urge to found an online book selling company. Bezos believed e-commerce would become a very profitable business because the Supreme Court had recently decided online sales are not taxable. In addition, he believed online sales would follow a long-tail distribution, allowing Amazon.com to sell and carry books that would not be economical for a physical store to carry. Bezos sold his first book from his garage in 1995 <ref name = book>[http://books.google.com/books?id=Nz43wixr2IcC&pg=PA47#v=onepage&q&f=false Jeff Bezos: The Founder of Amazon.com]</ref>.
  
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Within the first month of launching the website, Amazon.com had a searchable database of one million books available and had received orders from all 50 states and 45 different countries. Amazon.com stocked roughly 2,000 of the most popular titles and would order the titles they did not stock from wholesalers and publishers. Jeff Bezos eventually moved Amazon.com's fulfillment center from his garage to an office location in Seattle once it was evident Amazon.com was becoming a highly successful operation. Between 1995 and 1997, Bezos added an additional .5 million titles, implemented an approach of discounting nearly all products by 10-30%, and created a review, recommendation, and notification system. In 1997, Amazon.com became a public company in order to raise expansion capital. The company's initial public offering was three million shares.  In order to minimize distribution time, Amazon.com opened a new distribution center in New Castle, Delaware. Opening this new location, both minimized the time the books took to reach the customer and the time it took to receive the book from eastern publishing companies. Amazon.com also opened an "Associate" program, allowing other websites who hosted advertisements for books on Amazon.com to receive a commission of 8-15% if a consumer purchased the book after clicking on the ad. In October 1997, Amazon.com was the first website to announce reaching its one millionth customer. In March of 1998, Amazon.com had 2.6 million customers in its database, increasing 1.6 million customers in just five months. Amazon.com continued to expand, entering the music business and purchasing [[Wikipedia:Imdb|IMDB]] in 1998. Between 1999 and 2001, Amazon.com's sales continued to climb; however, it continued to post net losses due to Bezos' focus on market share above profit. Many were skeptical of whether Amazon.com would turn a profit after losing over $1 billion over the course of seven years. In 2001, Amazon.com reported its first net profit, and in the second quarter of 2002, it reported its second net profit <ref>[http://www.fundinguniverse.com/company-histories/amazon-com-inc-history/ FundingUniverse: History of Amazon, Inc.]</ref>.
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Within the first month of launching the website, Amazon.com had a searchable database of one million books available and had received orders from all 50 states and 45 different countries. Amazon.com stocked roughly 2,000 of the most popular titles and would order the titles they did not stock from wholesalers and publishers. Jeff Bezos eventually moved Amazon.com's fulfillment center from his garage to an office location in Seattle once it was evident Amazon.com was becoming a highly successful operation. Between 1995 and 1997, Bezos added an additional half million titles, implemented an approach of discounting nearly all products by 10-30%, and created a review, recommendation, and notification system. In 1997, Amazon.com became a public company in order to raise expansion capital. The company's initial public offering was three million shares.  In order to minimize distribution time, Amazon.com opened a new distribution center in New Castle, Delaware. Opening this new location both minimized the time the books took to reach the customer and the time it took to receive the book from eastern publishing companies. Amazon.com also opened an "Associate" program, allowing other websites who hosted advertisements for books on Amazon.com to receive a commission of 8-15% if a consumer purchased the book after clicking on the ad. In October 1997, Amazon.com was the first website to announce reaching its one millionth customer. In March of 1998, Amazon.com had 2.6 million customers in its database, an increase of 1.6 million customers in just five months. Amazon.com continued to expand, entering the music business and purchasing [[Wikipedia:Imdb|IMDB]] in 1998. Between 1999 and 2001, Amazon.com's sales continued to climb; however, it continued to post net losses due to Bezos' focus on market share above profit. Many were skeptical of whether Amazon.com would turn a profit after losing over $1 billion over the course of seven years. In 2001, Amazon.com reported its first net profit, and in the second quarter of 2002, it reported its second net profit <ref>[http://www.fundinguniverse.com/company-histories/amazon-com-inc-history/ FundingUniverse: History of Amazon, Inc.]</ref>.
  
  
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===Reviews===
 
===Reviews===
 
[[File:Amazon_Review.png|thumb|right|400px|Example of Amazon.com Product Review]]
 
[[File:Amazon_Review.png|thumb|right|400px|Example of Amazon.com Product Review]]
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Consumers can review sellers and products listed on the company's website through text or video. Amazon Seller Reviews are a review of a third-party seller's performance in selling the good the consumer purchased. Customers who are intending to purchase a product on Amazon browse through a list of third-party sellers to choose from whom they would like to purchase the product. The review system displays the sellers' aggregate rating along with the total number of people who have reviewed the seller. This can be useful information for a potential buyer of a good and is key in establishing trust between the consumer and the third-party seller.
+
Consumers can review sellers and products listed on the company's website through text or video. Amazon Seller Reviews are a review of a third-party seller's performance in selling the good the consumer purchased. Customers who intend to purchase a product on Amazon browse through a list of third-party sellers to choose which seller they would like to purchase the product from. The review system displays the sellers' aggregate rating along with the total number of people who have reviewed the seller. This can be useful information for a potential buyer and is key in establishing trust between the consumer and the third-party seller.
  
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Amazon Product Reviews allow consumers to review the products they have purchased. First, they are asked to give a 1-5 star overall rating of the product. Second, they require a title for the review. Finally, they ask for a detailed written review or a video review of the product. In addition, to the seller rating, this can be a useful tool to prospective customers of a product.
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Amazon Product Reviews allow consumers to review the products they have purchased. First, they are asked to give a 1-5 star overall rating of the product. Second, they require a title for the review. Finally, they ask for a detailed written review or a video review of the product. In addition to the seller rating, this can be a useful tool to prospective customers of a product.
  
 
===Third-Party Sellers===
 
===Third-Party Sellers===
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Roughly 40% of Amazon's profit is derived from its third-party sellers. Third-party sellers interested in selling on Amazon.com pay roughly an 8% commission to Amazon.com for products they fulfill. Sellers can opt to have their products fulfilled by Amazon.com for a 10-12% commission <ref name = services>[https://sellercentral.amazon.com/gp/fbacalc/fba-calculator.html Amazon Services: Fulfillment by Amazon Revenue Calculator]</ref><ref>[http://www.amazon.com/gp/help/customer/display.html?nodeId=200229160 Fulfillment by Amazon]</ref>. Amazon.com reported 1.6 million sellers sold products through Amazon.com in 2009 <ref>[http://articles.marketwatch.com/2009-06-11/industries/30739785_1_tom-szkutak-amazon-lower-prices/2 Market Watch: Third-Party Sales Fuel Overall Amazon Growth]</ref>. Unlike [[Wikipedia:Ebay|eBay]] payment for these products is handled directly through Amazon.com.
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Roughly 40% of Amazon's profit is derived from its third-party sellers. Third-party sellers interested in selling on Amazon.com pay roughly an 8% commission to Amazon.com for products they fulfill. Sellers can opt to have their products fulfilled by Amazon.com for a 10-12% commission <ref name = services>[https://sellercentral.amazon.com/gp/fbacalc/fba-calculator.html Amazon Services: Fulfillment by Amazon Revenue Calculator]</ref><ref>[http://www.amazon.com/gp/help/customer/display.html?nodeId=200229160 Fulfillment by Amazon]</ref>. Amazon.com reported that 1.6 million sellers sold products through Amazon.com in 2009 <ref>[http://articles.marketwatch.com/2009-06-11/industries/30739785_1_tom-szkutak-amazon-lower-prices/2 Market Watch: Third-Party Sales Fuel Overall Amazon Growth]</ref>. Unlike [[Wikipedia:Ebay|eBay]] payment for these products is handled directly through Amazon.com.
  
  
 
==Ethical Controversies==
 
==Ethical Controversies==
 
===Price Discrimination===
 
===Price Discrimination===
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In 2000, an account of price discrimination violating the [[Wikipedia:Robinson-Patman_Act|Robinson-Patman Act]] was found on Amazon.com. A customer interested in buying a DVD discovered that after deleting his cookies, he was offered a lower price for the DVD. In addition to this instance, it was found that customers who had cookies from a bargain-hunter website were offered a substantially lower price ($51 less) on an mp3 player <ref>[http://edition.cnn.com/2005/LAW/06/24/ramasastry.website.prices/ CNN: Web Sites Change Prices Based On Customers' Habits]</ref>.
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In 2000, an account of price discrimination violating the [[Wikipedia:Robinson-Patman_Act|Robinson-Patman Act]] was found on Amazon.com. A customer interested in buying a DVD discovered that after deleting his cookies, he was offered a lower price for the DVD. In addition, it was found that customers who had cookies from a bargain-hunter website were offered a substantially lower price ($51 less) on an mp3 player <ref>[http://edition.cnn.com/2005/LAW/06/24/ramasastry.website.prices/ CNN: Web Sites Change Prices Based On Customers' Habits]</ref>.
 
[[File:wolf.png|300px|thumb|left|A troll review of the "Three Wolf Moon" shirt]]
 
[[File:wolf.png|300px|thumb|left|A troll review of the "Three Wolf Moon" shirt]]
 +
 
===Review System===
 
===Review System===
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The Amazon.com review system has been challenged for its accuracy and integrity. In 2004, the New York Times discovered a number of Amazon book reviews were written by the authors themselves either promoting their own book or demoting their competitors' books <ref>[http://www.nytimes.com/2004/02/14/us/amazon-glitch-unmasks-war-of-reviewers.html?scp=6&sq=amazon+book+reviews&st=nyt New York Times: Amazon Glitch Unmasks War Of Reviewers]</ref>.The review system is also prone to being abused by internet [[troll]]s. Certain products such as the "Three Wolf Moon" t-shirt have gained media attention because of it's exaggerated and often fake reviews claiming magic powers. <ref>[http://knowyourmeme.com/memes/three-wolf-moon Know Your Meme: Three Wolf Moon]</ref>
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The Amazon.com review system has been challenged for its accuracy and integrity. In 2004, the New York Times discovered a number of Amazon book reviews were written by the authors themselves either promoting their own book or demoting their competitors' books <ref>[http://www.nytimes.com/2004/02/14/us/amazon-glitch-unmasks-war-of-reviewers.html?scp=6&sq=amazon+book+reviews&st=nyt New York Times: Amazon Glitch Unmasks War Of Reviewers]</ref>. The review system is also prone to being abused by internet [[troll]]s. Certain products such as the "Three Wolf Moon" t-shirt have gained media attention because of their exaggerated, and often fake, reviews claiming magic powers. <ref>[http://knowyourmeme.com/memes/three-wolf-moon Know Your Meme: Three Wolf Moon]</ref>
  
 
===eBook Ownership===
 
===eBook Ownership===
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Amazon has come under criticism after releasing their ebook reader, the Kindle, when some purchasers realized that the books they are buying are actually licensed to them, and can be revoked at any time.<ref>[http://www.technologyguide.com/default.asp?newsID=5231 Technology Guide: You Don't Own Your Amazon Kindle eBooks]</ref> Amazon's terms give rights to view the content of the book, but that is the extent. The company has the right to delete the customer's book(s), as well as delete their account. This raises concerns to those who consider the ebook to be property that they can do with what they like. Some have complained that this resulted in a "bricked" Kindle, one that is nearly useless.<ref>[http://www.mobileread.com/forums/showthread.php?t=44350&highlight=amazon+banning Mobile Read: Amazon has banned my account - my Kindle is now a (partial) brick]</ref>
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Amazon came under criticism after releasing their e-book reader, the Kindle, when some purchasers realized that the books they buy are actually licensed to them, and can be revoked at any time - Amazon's terms give rights only to view the content of the book.<ref>[http://www.technologyguide.com/default.asp?newsID=5231 Technology Guide: You Don't Own Your Amazon Kindle eBooks]</ref> The company retains the right to delete customers' books, as well as to delete their accounts. This raises concerns for those considering the ebook to be their property. Some have complained that this resulted in a "bricked" Kindle, that is nearly useless.<ref>[http://www.mobileread.com/forums/showthread.php?t=44350&highlight=amazon+banning Mobile Read: Amazon has banned my account - my Kindle is now a (partial) brick]</ref>
  
 
==Products and Services==
 
==Products and Services==
 
===Retail Goods===
 
===Retail Goods===
−
Amazon.com sells a great selections of products including books, movies, music & games, electronics & computers, home, garden & tools, toys, baby products, grocery, beauty products, clothing, jewelry, industrial & scientific supplies, and sporting goods. Originally the company used the platform of web auctions service to sell its products. Unfortunately, it was an unsuccessful turn-out due to the existing competition with eBay. Amazon decided to changed its platform to a fixed-price marketplace business. As the result, amazon.com was established and started expanding its market in the year of 1999.   
+
Amazon.com sells a great selection of products including books, movies, music & games, electronics & computers, home, garden & tools, toys, baby products, grocery, beauty products, clothing, jewelry, industrial & scientific supplies, and sporting goods. Originally the company used the platform of web auctions service to sell its products. Unfortunately, it was an unsuccessful turn-out due to the existing competition with eBay. Amazon decided to changed its platform to a fixed-price marketplace business. As the result, Amazon.com was established and started expanding its market in the year of 1999.   
 +
 
 
===Amazon Kindle===
 
===Amazon Kindle===
 
[[File:Kindle-fire-hd.jpg|200px|thumb|right|Kindle Fire HD]]
 
[[File:Kindle-fire-hd.jpg|200px|thumb|right|Kindle Fire HD]]
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The [[Wikipedia:Amazon_Kindle|Amazon Kindle]] is an electronic device that allows the user to download, store and read electronic books, also known as e-books. The user can access the Amazon store with more than 115 000 e-books. The Kindle allows the customers also to read newspapers, magazines, blogs and even hear audio books and other mp3 files <ref>[http://www.askdeb.com/technology/kindle/what/ What is a Kindle?]Retrieved October 31, 2012.</ref>. The word Kindle means "to set fire, to start a fire"<ref>[http://www.etymonline.com/index.php?term=kindle Online Etymology Dictionary.]Retrieved November 5, 2012.</ref>, which definition explains the name that the newer Kindles would acquire called Kindle Fire. The table was named by Michael Cronan<ref>[http://nancyfriedman.typepad.com/away_with_words/2008/12/how-the-kindle-got-its-name.html Fritinancy: How the Kindle Got Its Name]Retrieved Nov 5,2012.</ref> and made by made by lab 126, a company owned by Amazon.com whose main goal is to produce high-tech products such as the Kindle<ref>[http://nancyfriedman.typepad.com/away_with_words/2008/12/how-the-kindle-got-its-name.html Lab 126]Retrieved Nov 5, 2012</ref>.  The Kindle Fire is the first generation of Kindle to have a color touch screen.  Along with the 7" LCD displsy, the Kindle Fire uses [[Android]] software.  The device has 8GB of storage and a projected battery life of up to eight hours.  The Kindle Fire is now available in an HD format as well.<ref>[http://www.engadget.com/2011/09/28/amazon-fire-tablet-unveiled-7-inch-display-199-price-tag/ Amazon Fire Tablet Unveiled 7-inch Display $199 price tag]Retrieved Nov 5,2012. </ref>
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The [[Wikipedia:Amazon_Kindle|Amazon Kindle]] is an electronic device that allows users to download, store and read electronic books, also known as e-books. The user can access the Amazon store with more than 115 000 e-books. The Kindle allows the customers also to read newspapers, magazines, blogs and even hear audio books and other MP3 files <ref>[http://www.askdeb.com/technology/kindle/what/ What is a Kindle?]Retrieved October 31, 2012.</ref>. The word Kindle means "to set fire, to start a fire"<ref>[http://www.etymonline.com/index.php?term=kindle Online Etymology Dictionary.]Retrieved November 5, 2012.</ref>, which explains the name given Amazon's newer Kindle tablets: Kindle Fire. The table was named by Michael Cronan<ref>[http://nancyfriedman.typepad.com/away_with_words/2008/12/how-the-kindle-got-its-name.html Fritinancy: How the Kindle Got Its Name]Retrieved Nov 5,2012.</ref> and made by lab 126, a company owned by Amazon.com whose main goal is to produce high-tech products<ref>[http://nancyfriedman.typepad.com/away_with_words/2008/12/how-the-kindle-got-its-name.html Lab 126]Retrieved Nov 5, 2012</ref>.  The Kindle Fire is the first generation of Kindle to have a color touch screen.  Along with the 7" LCD display, the Kindle Fire uses [[Android]] software.  The device has 8GB of storage and a projected battery life of up to eight hours.  The Kindle Fire is now available in an HD format as well.<ref>[http://www.engadget.com/2011/09/28/amazon-fire-tablet-unveiled-7-inch-display-199-price-tag/ Amazon Fire Tablet Unveiled 7-inch Display $199 price tag]Retrieved Nov 5,2012. </ref>
  
 
===Amazon Prime===
 
===Amazon Prime===
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Requesters must have an Amazon account and register for Amazon Mechanical Turk usage. When a worker appropriately completes a task, the requester must then pay the worker and Amazon fees through their Amazon account. Workers must comply to Amazon Mechanical Turk's policies, such as not using the site for illegal purposes<ref> [https://requester.mturk.com/help/faq#how_pay_hit Amazon Mechanical Turk: How do I pay for HITs?]</ref>.
 
Requesters must have an Amazon account and register for Amazon Mechanical Turk usage. When a worker appropriately completes a task, the requester must then pay the worker and Amazon fees through their Amazon account. Workers must comply to Amazon Mechanical Turk's policies, such as not using the site for illegal purposes<ref> [https://requester.mturk.com/help/faq#how_pay_hit Amazon Mechanical Turk: How do I pay for HITs?]</ref>.
  
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Workers must also have both an Amazon account and register for Amazon Mechanical Turk usage. Workers may view available HITs and work on any HITs in which they have appropriate qualifications for. They may request for qualifications in order to complete more HITs. The payment reward, time alloted, and expiration date are among the details listed for each HIT <ref>[https://www.mturk.com/mturk/welcome Mechanical Turk]</ref>.
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Workers must also have both an Amazon account and register to use Amazon Mechanical Turk. Workers may view available HITs and work on any HITs in which they are qualified to do. They may request qualifications in order to complete more HITs. The payment reward, time allotted, and expiration date are among the details listed for each HIT <ref>[https://www.mturk.com/mturk/welcome Mechanical Turk]</ref>.
  
 
===Amazon playing a role in the offline economy===
 
===Amazon playing a role in the offline economy===
  
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Amazon is one of the biggest retail stores in the world. Currently is positioned number 15th biggest retail store in United States, the 56th biggest store in America by market capitalization, and the 1st largest Internet retailer. <ref> [http://business.time.com/2012/07/16/will-amazon-take-over-the-world/ Will Amazon Take Over the World] Retrieved Dec 1, 2012</ref> By Amazon.com becoming such a big company, it has caused a negative impact in a lot of business in the offline world. It has made many companies and stores go out of business like Borders Bookstore <ref name = economy>[http://onpoint.wbur.org/2012/07/12/the-amazon-economy The Amazon Economy] Retrieved Dec 1, 2012</ref>, since Amazon is able to offer most of the products imaginable in one place and most o the time for a cheaper place that the other stores.
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Amazon is one of the biggest retail stores in the world. It is currently the 15th largest retail store in the United States, the 56th largest store in America by market capitalization, and the largest Internet retailer. <ref> [http://business.time.com/2012/07/16/will-amazon-take-over-the-world/ Will Amazon Take Over the World] Retrieved Dec 1, 2012</ref> Although Amazon.com is an online retailer, it has had negative impacts on businesses in the offline world. Amazon has caused many companies and stores to go out of business, since they are able to offer a wide variety of products in one place, often for lower prices than offline retailers.<ref name = economy>[http://onpoint.wbur.org/2012/07/12/the-amazon-economy The Amazon Economy] Retrieved Dec 1, 2012</ref>
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Besides causing many stores to close, Amazon has helped as well a large amount of business. Amazon takes their orders, warehouses their stock and ships what the customer orders for the business<ref name = economy/>, making it very convenient and easy for the stores.
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==See Also==
 
==See Also==

Revision as of 06:13, 5 December 2012

←Back • ↑Topics • ↑Categories
amazon.com
Amazon-logo.jpg
AmazonStore.png
"Your Amazon.com: Online Shopping 2012" Site
Type E-Commerce
Cloud Based Storage
Software Developer
Hardware Developer
Launch Date 1995
Status Active
Product Line Shopping Website
Kindle Fire
Kindle eReader
Kindle Cloud Reader
Amazon Cloud Storage
Platform Cloud Service
Android Tablet
Android App
iOs App
Website www.amazon.com

Amazon.com, Inc. is the largest e-commerce company worldwide [1]. The company is also known for its product line of Amazon Kindle e-book readers, Amazon Kindle Fire tablets, Amazon Web Services cloud computing services, and Amazon Mechanical Turk online marketplace for work. Jeff Bezos founded Amazon.com in 1995 in Seattle, Washington [2]. Originally, Amazon.com sold a wide array of books, but it has expanded its inventory to products, including CD's, DVD's, electronics, apparel, along with almost any other good[2].

History

Amazon.com in 1999

Jeff Bezos conceptualized Amazon.com in 1994 while working at D.E. Shaw & Co., a global investment management corporation. After weighing the pros and cons through a process he described as "regret minimization," he decided to leave D.E. Shaw in order to pursue his urge to found an online book selling company. Bezos believed e-commerce would become a very profitable business because the Supreme Court had recently decided online sales are not taxable. In addition, he believed online sales would follow a long-tail distribution, allowing Amazon.com to sell and carry books that would not be economical for a physical store to carry. Bezos sold his first book from his garage in 1995 [2].

Within the first month of launching the website, Amazon.com had a searchable database of one million books available and had received orders from all 50 states and 45 different countries. Amazon.com stocked roughly 2,000 of the most popular titles and would order the titles they did not stock from wholesalers and publishers. Jeff Bezos eventually moved Amazon.com's fulfillment center from his garage to an office location in Seattle once it was evident Amazon.com was becoming a highly successful operation. Between 1995 and 1997, Bezos added an additional half million titles, implemented an approach of discounting nearly all products by 10-30%, and created a review, recommendation, and notification system. In 1997, Amazon.com became a public company in order to raise expansion capital. The company's initial public offering was three million shares. In order to minimize distribution time, Amazon.com opened a new distribution center in New Castle, Delaware. Opening this new location both minimized the time the books took to reach the customer and the time it took to receive the book from eastern publishing companies. Amazon.com also opened an "Associate" program, allowing other websites who hosted advertisements for books on Amazon.com to receive a commission of 8-15% if a consumer purchased the book after clicking on the ad. In October 1997, Amazon.com was the first website to announce reaching its one millionth customer. In March of 1998, Amazon.com had 2.6 million customers in its database, an increase of 1.6 million customers in just five months. Amazon.com continued to expand, entering the music business and purchasing IMDB in 1998. Between 1999 and 2001, Amazon.com's sales continued to climb; however, it continued to post net losses due to Bezos' focus on market share above profit. Many were skeptical of whether Amazon.com would turn a profit after losing over $1 billion over the course of seven years. In 2001, Amazon.com reported its first net profit, and in the second quarter of 2002, it reported its second net profit [3].


Website

Reviews

Example of Amazon.com Product Review

Consumers can review sellers and products listed on the company's website through text or video. Amazon Seller Reviews are a review of a third-party seller's performance in selling the good the consumer purchased. Customers who intend to purchase a product on Amazon browse through a list of third-party sellers to choose which seller they would like to purchase the product from. The review system displays the sellers' aggregate rating along with the total number of people who have reviewed the seller. This can be useful information for a potential buyer and is key in establishing trust between the consumer and the third-party seller.

Amazon Product Reviews allow consumers to review the products they have purchased. First, they are asked to give a 1-5 star overall rating of the product. Second, they require a title for the review. Finally, they ask for a detailed written review or a video review of the product. In addition to the seller rating, this can be a useful tool to prospective customers of a product.

Third-Party Sellers

Roughly 40% of Amazon's profit is derived from its third-party sellers. Third-party sellers interested in selling on Amazon.com pay roughly an 8% commission to Amazon.com for products they fulfill. Sellers can opt to have their products fulfilled by Amazon.com for a 10-12% commission [4][5]. Amazon.com reported that 1.6 million sellers sold products through Amazon.com in 2009 [6]. Unlike eBay payment for these products is handled directly through Amazon.com.


Ethical Controversies

Price Discrimination

In 2000, an account of price discrimination violating the Robinson-Patman Act was found on Amazon.com. A customer interested in buying a DVD discovered that after deleting his cookies, he was offered a lower price for the DVD. In addition, it was found that customers who had cookies from a bargain-hunter website were offered a substantially lower price ($51 less) on an mp3 player [7].

A troll review of the "Three Wolf Moon" shirt

Review System

The Amazon.com review system has been challenged for its accuracy and integrity. In 2004, the New York Times discovered a number of Amazon book reviews were written by the authors themselves either promoting their own book or demoting their competitors' books [8]. The review system is also prone to being abused by internet trolls. Certain products such as the "Three Wolf Moon" t-shirt have gained media attention because of their exaggerated, and often fake, reviews claiming magic powers. [9]

eBook Ownership

Amazon came under criticism after releasing their e-book reader, the Kindle, when some purchasers realized that the books they buy are actually licensed to them, and can be revoked at any time - Amazon's terms give rights only to view the content of the book.[10] The company retains the right to delete customers' books, as well as to delete their accounts. This raises concerns for those considering the ebook to be their property. Some have complained that this resulted in a "bricked" Kindle, that is nearly useless.[11]

Products and Services

Retail Goods

Amazon.com sells a great selection of products including books, movies, music & games, electronics & computers, home, garden & tools, toys, baby products, grocery, beauty products, clothing, jewelry, industrial & scientific supplies, and sporting goods. Originally the company used the platform of web auctions service to sell its products. Unfortunately, it was an unsuccessful turn-out due to the existing competition with eBay. Amazon decided to changed its platform to a fixed-price marketplace business. As the result, Amazon.com was established and started expanding its market in the year of 1999.

Amazon Kindle

Kindle Fire HD

The Amazon Kindle is an electronic device that allows users to download, store and read electronic books, also known as e-books. The user can access the Amazon store with more than 115 000 e-books. The Kindle allows the customers also to read newspapers, magazines, blogs and even hear audio books and other MP3 files [12]. The word Kindle means "to set fire, to start a fire"[13], which explains the name given Amazon's newer Kindle tablets: Kindle Fire. The table was named by Michael Cronan[14] and made by lab 126, a company owned by Amazon.com whose main goal is to produce high-tech products[15]. The Kindle Fire is the first generation of Kindle to have a color touch screen. Along with the 7" LCD display, the Kindle Fire uses Android software. The device has 8GB of storage and a projected battery life of up to eight hours. The Kindle Fire is now available in an HD format as well.[16]

Amazon Prime

Amazon Prime is a service that provides free two-day shipping on select items to customers who pay an annual amount for an Amazon Prime Membership. Currently, this membership costs $79 for US customers and is offered at $39 for students with a valid university email. In order for an item to be eligible for Amazon Prime, it must be either sold directly by Amazon.com, or a third-party seller must opt to have the item fulfilled by Amazon [17]. Third-party sellers interested in having an item fulfilled by amazon (FBA) send their inventory to an Amazon.com fulfillment warehouse, and Amazon.com will ship and provide all customer service for the item for a 10-12% fee [4].

Amazon Web Services

AmazonWS.jpeg

Amazon started this services branch, AWS, in 2002 and now offers about 30 different services, one being Amazon EC2, Amazon elastic compute cloud.

Amazon EC2 provides resizable compute capacity in the cloud. You define your virtual Amazon EC2 environment with the operating system, services, databases, and application platform stack required for your hosted application. Amazon EC2 provides a full management console and APIs to manage your compute resources. [18].

Amazon Mechanical Turk

Amazon Mechanical Turk gives businesses and developers a means of a large, cheap, and temporary workforce. The website is based on the idea that some tasks require a human to complete them, rather than a computer. Such tasks are dubbed Human Intelligence Tasks, or "HITs", and range from typing recipes to writing captions on pictures to transcribing recordings. Each HIT pays very little to the worker once the requester approves the work, anywhere from a few cents to a few dollars. Workers may either transfer the payments to an Amazon gift card or to their bank account, but may only do so after at least $10.00 is earned.[19].

Requesters must have an Amazon account and register for Amazon Mechanical Turk usage. When a worker appropriately completes a task, the requester must then pay the worker and Amazon fees through their Amazon account. Workers must comply to Amazon Mechanical Turk's policies, such as not using the site for illegal purposes[20].

Workers must also have both an Amazon account and register to use Amazon Mechanical Turk. Workers may view available HITs and work on any HITs in which they are qualified to do. They may request qualifications in order to complete more HITs. The payment reward, time allotted, and expiration date are among the details listed for each HIT [21].

Amazon playing a role in the offline economy

Amazon is one of the biggest retail stores in the world. It is currently the 15th largest retail store in the United States, the 56th largest store in America by market capitalization, and the largest Internet retailer. [22] Although Amazon.com is an online retailer, it has had negative impacts on businesses in the offline world. Amazon has caused many companies and stores to go out of business, since they are able to offer a wide variety of products in one place, often for lower prices than offline retailers.[23]

See Also


External Links

References

  1. ↑ Internet Retailer: The Top 500 List
  2. ↑ 2.0 2.1 2.2 Jeff Bezos: The Founder of Amazon.com
  3. ↑ FundingUniverse: History of Amazon, Inc.
  4. ↑ 4.0 4.1 Amazon Services: Fulfillment by Amazon Revenue Calculator
  5. ↑ Fulfillment by Amazon
  6. ↑ Market Watch: Third-Party Sales Fuel Overall Amazon Growth
  7. ↑ CNN: Web Sites Change Prices Based On Customers' Habits
  8. ↑ New York Times: Amazon Glitch Unmasks War Of Reviewers
  9. ↑ Know Your Meme: Three Wolf Moon
  10. ↑ Technology Guide: You Don't Own Your Amazon Kindle eBooks
  11. ↑ Mobile Read: Amazon has banned my account - my Kindle is now a (partial) brick
  12. ↑ What is a Kindle?Retrieved October 31, 2012.
  13. ↑ Online Etymology Dictionary.Retrieved November 5, 2012.
  14. ↑ Fritinancy: How the Kindle Got Its NameRetrieved Nov 5,2012.
  15. ↑ Lab 126Retrieved Nov 5, 2012
  16. ↑ Amazon Fire Tablet Unveiled 7-inch Display $199 price tagRetrieved Nov 5,2012.
  17. ↑ Amazon.com
  18. ↑ AWS Application Support
  19. ↑ Amazon Mechanical Turk: FAQ
  20. ↑ Amazon Mechanical Turk: How do I pay for HITs?
  21. ↑ Mechanical Turk
  22. ↑ Will Amazon Take Over the World Retrieved Dec 1, 2012
  23. ↑ The Amazon Economy Retrieved Dec 1, 2012


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