Comprehensive Analysis of Amazon's E-commerce Business Model

This report provides a detailed analysis of Amazon's e-commerce business model. It begins with an overview of the company's founders, Jeff Bezos, and its history, tracing its evolution from a book retailer to a global e-commerce giant. The report examines Amazon's business goals, which center on customer satisfaction through excellent online retail, fast deliveries, secure payments, and easy order management. It explores the company's business model transformations, including the shift from a Business-to-Consumer (B2C) model to incorporate Business-to-Business (B2B) and Consumer-to-Business (C2B) models. The report details Amazon's revenue model, including sales, commissions, and advertising. It also analyzes the company's target markets, which have expanded from the United States to a global scale, and the wide range of products and services offered. The report also discusses advertising methods, business partners, customer demographics, and market share, providing a comprehensive overview of Amazon's strategies and success in the e-commerce landscape. Finally, the report includes references from where the information was collected.

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E-Commerce Business Model
Amazon
5/10/2018

E-commerce Business Model
Table of Contents
Founder(s).............................................................................................................................................2
History of starting and running the business..........................................................................................2
Business goals.......................................................................................................................................2
Business model(s) transformation.........................................................................................................2
Revenue model(s) changes....................................................................................................................2
Target markets from beginning up to now.............................................................................................3
Ranges of products or services..............................................................................................................3
Advertising methods..............................................................................................................................3
Types of business partners.....................................................................................................................3
Types of customers (demographic features)..........................................................................................3
Market share size...................................................................................................................................3
References.............................................................................................................................................5
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E-commerce Business Model
Founder(s)
The e-commerce site that is being used for analysing the e-commerce business model is
Amazon.com. The founder of the business is Jeff Bezos.
History of starting and running the business
Amazon.com is the world’s largest online retailer and it was found by Jeff Bezos in the year
1994 in Seattle, United States. The company started with the retailing of books that were sold
out from the garage of its founder. The company issued its first public offering with the share
price of $18 per unit in May 1997. According to the policy at that time, the company was set
to make no profit till 5 years. This became a cause of worry for the business partners.
However, in the first quarter of 2001, the company made a profit of $5 million with revenue
of $1 billion. The company then went on to add additional products in its catalogue and
expanded its operations to other global locations. It now sells every product from groceries to
electrical appliances, apparels, household products, books, and what-not (Hartmans, 2017).
Business goals
The primary goal of the company is to serve its customers with excellent online retailing,
faster deliveries, secure payments, and easy order management to attain enhanced customer
satisfaction and engagement levels.
Business model(s) transformation
Business Model Innovation (BMI) is the primary model that is followed at Amazon. It started
its business by serving the customers with the online retail shop. The business model that was
followed during the inception was Business to Consumer (B2C) model. The company then
spread out to the incorporation of Business-to-Business (B2B), and Consumer-to-Business
(C2B) models with the innovative solutions (Pahwa, 2018).
Revenue model(s) changes
Amazon generates its revenue from the sales that it makes through the online platform,
commission from the suppliers with every order that is placed and advertisements that are
launched on the portal.
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E-commerce Business Model
Target markets from beginning up to now
The target markets of the company were limited to the United States at the time of inception.
However, the company now targets global markets capturing United Kingdom, Asia, Middle-
East, Australia, and many other regions.
Earlier, the book readers and book sellers were the primary customers targeted. However,
with the expansion of product catalogue, there are products available for every user.
Ranges of products or services
The range of products offered by Amazon.com include books, movies, computers,
electronics, food & grocery, garden, beauty & health, apparels & fashion, toys, automotive,
and industrial (Amazon, 2018).
Advertising methods
Advertising methods on Amazon may be on and off. Paid & free advertising may be done on
Amazon or paid & promotionary marketing may be done as well. Amazon SEO is free of
cost. The other methods include Amazon Vine, giveaways, promotions & coupon codes, pay
per click ads, and launch campaigns.
Types of business partners
Amazon has a partner retailer network and supplier network that assist the business to carry
on with its deliveries and supplies. It has also partnered with courier and logistics companies
all across the globe.
Types of customers (demographic features)
The type of customers associated with Amazon includes people of varied age groups,
backgrounds, regions, and genders. There are products available for kids, such as toys,
games, sports, and outdoors. Adults and senior citizens may also explore and purchase the
products from any of the departments.
Market share size
The market share captured by Amazon.com in United States in the year 2017 was 37% of the
entire retail market. The numbers are expected to go up to 50% by the end of 2021. The
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E-commerce Business Model
company earned revenue of USD 17,786 crores in 2017 and the figures will only improve in
the subsequent years (Statista, 2018).
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E-commerce Business Model
References
Amazon (2018). Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books,
DVDs & more. [online] Amazon.com. Available at: https://www.amazon.com/ [Accessed 10
May 2018].
Hartmans, A. (2017). 15 fascinating facts you probably didn't know about Amazon. [online]
Business Insider. Available at: https://www.businessinsider.in/15-fascinating-facts-you-
probably-didnt-know-about-Amazon/articleshow/58095178.cms [Accessed 10 May 2018].
Pahwa, A. (2018). Amazon Business Model | How big is Amazon | Feedough. [online]
Feedough. Available at: https://www.feedough.com/amazon-business-model/ [Accessed 10
May 2018].
Statista (2018). U.S. Amazon e-commerce retail market share 2021 | Statistic. [online]
Statista. Available at: https://www.statista.com/statistics/788109/amazon-retail-market-share-
usa/ [Accessed 10 May 2018].
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