THE
CHARGER
Founded in 1994 in Seattle, Washington, Amazon initially was a company that sold books over the internet. A majority of Amazon’s success comes from its ability to innovate. According to Jeff Bezos, the CEO of Amazon, the company gained its current success by putting the customer first, innovating, and being patient.
Another reason for Amazon’s success is its extreme competitiveness online. To the benefit of its customers, the company undercuts its competitors by reducing the profit margin on each product sold. For the first 20 years, Amazon sold its items with break-even profits until the company could scale and build up infrastructure. The company typically “took out” smaller companies by following a monopolistic approach. One example of this predatory approach was when Diapers.com began to effectively compete with Amazon. Amazon responded by lowering its diaper prices by more than a third, forcing Diapers.com to sell itself to Amazon.
Amazon’s business model has changed drastically throughout the years, and as the company has grown into a tech giant, it appears to be disrupting or absorbing anything in its path.
Not all of Amazon’s income comes from the products it sells. The company’s marketplace and fulfillment systems have made it one of the most popular platforms for third-party vendors. Such services provide more streams of income for Amazon while offering customers even more products to choose from. Another reason for Amazon’s growth is the reputation it has built. This reputation allows the company to expand into other industries quickly. As a majority of retail spending still takes place offline, Amazon has a lot of room to grow. The company is predicted to continue expanding while displacing everything that stands in its way.
Amazon’s lower prices have gained the trust of consumers, especially those who have a Prime membership. As Amazon began to grow, it implemented its Prime membership program. The Prime membership encourages customers to spend more than they usually would on the website, and it encourages the members to use other parts of the site, such as eBooks and video streaming. The Prime membership is a $99 per-year subscription that gives the customer access to free two-day shipping, music and video streaming. According to, Consumer Intelligence Research Partners, this program has an estimated 85 million members in the U.S. alone; this is equivalent to approximately two-thirds of American households. Amazon is 44 percent of all online commerce in the U.S. and roughly five percent of the total commerce in the United States.
In July of 2017, the company announced it was going to acquire Whole Foods for just under $14 billion. This is the largest acquisition by Amazon thus far paving the way for the company’s future in grocery shopping. Amazon sees this as an opportunity to expand into the food-delivery business. More people are ordering food online and having it delivered. With this acquisition, Amazon will have the infrastructure to accomplish this.
Amazon is not only controlling e-commerce but is also planning on opening stores around the United States. The company is introducing storefronts called “Amazon Go” and is trying to transform the $550 billion American convenience store market. To enter these stores, the customers must have the Amazon app downloaded and scan the QR code as they enter. Once they “sign in” to the store, customers can request a specific item, and the robots and computers in the store will deliver the item to them. This allows stores to operate without the need for workers manning the registers and stocking the shelves. Once the customer is ready to leave, Amazon will charge them for the items. If the customers aren’t happy with the purchase, they can simply hit refund on their phone and return the item. This will have a massive impact on the current retail market by removing the need for humans to work the store.
Amazon has also displayed a growing ambition to enter the clothing industry with its recent acquisition of Body Labs, a start-up that specializes in 3D body scanning and modeling. This company uses 3D scanning to produce better size recommendations for customers, which reduces the number of online clothing returns. Amazon plans to implement this technology to help its customers better shop for clothing. The company plans to link this technology with the Echo Look, an extension of its Echo Dot, that gives fashion recommendations and a new service called Amazon Wardrobe that allows Prime members to “virtually” try on clothes before they purchase.
Amazon continues to expand its retail presence offline, the company introduces their own store fronts in Seattle. Photo courtesy of JJ Merelo
Amazon Prime is an $99 annual subscription that gives members access to video streaming, 2 day shipping, and other benefits. Image courtesy of Amazon.com
Amazon continues to expand its retail presence offline, the company introduces their own store fronts in Seattle. Photo courtesy of JJ Merelo
Amazon Echo Look, an extension of the Echo Dot, uses a camera and sensors to allow customers to try on clothes virtually before purchasing. Image courtesy of Amazon’s Youtube Channel
Wall Street clearly believes in the future of Amazon, giving it the second largest market cap in America at $750 billion, according to Google Finance. The company continues to obtain a larger percentage of the retail market and don’t seem to have a competitor in sight.
Jeff Bezos, CEO of Amazon. Image courtesy of Adrian Cadiz.
How Amazon Is Taking Over The World
By Tucker Danon
"Amazon is 44 percent of all online commerce in the U.S. and roughly five percent of the total commerce in the United States."
"Amazon isn’t seeking to create only robot-run stores; it is looking to buy traditional brick-and-mortar places staffed by people."
"Amazon is used in more than two thirds of American households."