Beginning modestly in 1995 as an online bookstore, Amazon.com became one of the first success stories of the early Internet economy. Named for the world’s largest river, Amazon.com was the brainchild of entrepreneur Jeffrey Bezos. Like a number of other entrepreneurs of the early 1990s, Bezos had been searching for a way to market to the growing number of people who were going online. He soon decided that books were a good first product, since they were popular, nonperishable, relatively compact, and easy to ship. Several million books are in print at any one time, with about 275,000 titles or editions added in 2007 in the United States alone. Traditional “brick and mortar” (physical) bookstores might carry a few thousand titles up to perhaps 200,000 for the largest chains. Bookstores in turn stock their shelves mainly through major book distributors that serve as intermediaries between publishers and the public.For an online bookstore such as Amazon.com, however, the number of titles that can be made available is limited only by the amount of warehouse space the store is willing to maintain—and no intermediary between publisher and bookseller is needed. From the start, Amazon.com’s business model has capitalized on this potential for variety and the ability to serve almost any niche interest. Over the years the company’s offerings have expanded beyond books to 34 different categories of merchandise, including software, music, video, electronics, apparel, home furnishings, and even nonperishable gourmet food and groceries.
Expansion and Profitability:-
Because of its desire to build a very diverse product line, Amazon.com, unusually for a business startup, did not expect to become profitable for about five years. The growing revenues were largely poured back into expansion. In the heated atmosphere of the Internet boom of the late 1990s, many other Internet-based businesses echoed that philosophy, and many went out of business following the bursting of the so-called dot-com bubble of the early 2000s. Some analysts questioned whether even the hugely popular Amazon.com would ever be able to convert its business volume into an operating profit. However, the company achieved its first profitable year in 2003 . Since then growth has remained steady and generally impressive:
Because of its desire to build a very diverse product line, Amazon.com, unusually for a business startup, did not expect to become profitable for about five years. The growing revenues were largely poured back into expansion. In the heated atmosphere of the Internet boom of the late 1990s, many other Internet-based businesses echoed that philosophy, and many went out of business following the bursting of the so-called dot-com bubble of the early 2000s. Some analysts questioned whether even the hugely popular Amazon.com would ever be able to convert its business volume into an operating profit. However, the company achieved its first profitable year in 2003 . Since then growth has remained steady and generally impressive:
In 2005, Amazon.com earned $8.49 billion revenues with a net income of $359 million. By then the company had about 12,000 employees and had been added to the S&P 500 stock index. In 2006 the company maintained its strategy of investing in innovation rather than focusing on short-term profits. Its latest initiatives include selling digital versions of books and magazine articles, new arrangements to sell video content, and even a venture into moviemaking. By year end, annual revenue had increased to $10.7 billion.
No comments:
Post a Comment