Amazon.com has been able to survive the online world because it had a viable and innovative business model that was built around a customer-changing value proposition and a radical profit formula which worked out in opening the book industry. When the company was founded, it was only dealing with brokering books purchases through its website. After five years of experiencing growth in the book industry, the company expanded to other consumer goods that could be easily shipped as well as expanding to adjacent markets (Amazon, 2012).
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The main strategy that worked for Amazon was the model to serve a totally different group of customers who were the third party sellers. These were basically its competitors and this led to transformation of business form direct sales to a sales-and -service model. This model involved bringing together many sellers to be under one virtual roof and at the same time receiving commissions from the other companies’ sales. This was however followed by adoption of another new model that required different processes and resources to serve a new customer who was the IT community. This called for the launch of a web services platform, the model which the company still survives on up to today.
Regarding customer value proposition, Amazon.com believes that it is the most 'customer-centric' company which gives its customers whatever they need, according to how they need it and when they need it. Some of the actions geared towards customer value propositions include allowing suggestive selling from the customers by allowing free book reviews and customer recommendations. The company also allows the customers purchase circles where sellers are listed by region and country. Customers can also access free e-greetings, Zshops and Auctions through the web. All these services gives the customers seamless fulfillment (Digital 4Sight Corp., 2000).
The company's customer fulfillment network starts with the first stage where the customer places order and then his/her credit card is processed for payment, the order is then sent to the appropriate supplier if it is not available in the Amazon's warehouse, the product is then delivered to Amazon's warehouse where it is packed and shipped, then finally its is delivered to the customer from the nearest warehouse.
Amazon.com uses a sales revenue model where revenue is generated through taking a small percentage of the price of every item that is sold through its website. The company also allows other companies to advertise on the website where buyers browse through the products. This is also another source of revenue for the company. 56 percent of its total revenue comes from North America while 44% comes from international sales (Amazon, 2012).
Amazon’s marketplace is the fixed-price online marketplace where the company allows sellers to place their new and used items together with Amazon’s items. Customers are therefore able to buy those items directly from those other sellers using the infrastructure that has been set by Amazon or to buy the Amazon products directly (Amazon, 2012). All these items are available in Amazon’s website in more than 60 countries of the world although some sellers do not prefer selling international because of shipment expenses. Some of Amazon’s competitors include those who are retailing in the physical world, other e-commerce companies and the media companies. The main competitors in the e-commerce include Sony e-tail and Wal-Mat. However Amazon enjoys a competitive advantage over these companies because it is able to offer low prices, a wide variety of products and shopping convenience where one can shop from home or by use of mobile devices and have the option of ‘same day delivery’. The company employs a marketing strategy that aims at satisfying the customers and ensuring efficient corporate growth. The company’s marketing strategy is supported by factors such as a customer-friendly interface, its well established communication system, utilization of universal behaviors and mentality and its ability to exploit its affiliate’s products and resources (Digital 4Sight Corp., 2000).
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