Let’s get into The Story of Amazon!
From “Earth’s biggest bookstore”, Amazon has grown to literally become the planet’s biggest store. And all this has taken barely 23 years. Pretty impressive, isn’t it? If you have ever wondered how Amazon got to be where it is today in the e-commerce universe, then you’re just in time.
Our article is packed full of everything you need to know about this e-commerce giant. Maybe you could even find a trick or two to help with your own business. Who knows?
But before we go down memory lane, let’s see some of the things Amazon is up to right now. Caveat: you might feel a little (okay, a lot) intimidated. But you asked for it. Here goes…
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Amazon Right Now
Of course, you already know that Amazon’s owner, Jeff Bezos, is the wealthiest person on the planet right now. And if you didn’t, well, now you know… He took over from Bill Gates who held that spot since some millennials were born.
With Bezos’ net worth running over 140 billion dollars, Bill Gates whose net worth is estimated to be 92.5 billion dollars (which is still a lot of money for heaven’s sake), had to, you know, step down.
Amazon itself is currently the world’s third most valuable public company (coming behind Apple and Alphabet only). In terms of revenue and market capitalization, the company ranks as the number one internet based retailer on the world. And in terms of total sales, it ranks only after Alibaba. These, on their own, are pretty impressive facts, however, there is more. Buckle down.
Today, 44% of the USA e-commerce market is held by Amazon. The company sells more than 3 billion different products monthly, with more than 1 million new products added to its stores on a daily basis. The platform is currently being used by over 300 million active users and the projection is that by 2020, Amazon would be selling over 12 billion products.
Where Does Amazon Sell?
According to Wikipedia, Amazon has separate retail sites for certain countries. These countries include the United States, Mexico, the United Kingdom and Ireland, Australia, France, Italy, China, Japan, Germany, Netherlands, Brazil, Spain, Canada, and India. However, it makes its largest profit from the United States. Following the US are Germany, Japan, and the United Kingdom respectively.
The United States, where Amazon draws its most significant profits, is also the country where Amazon contributes the most in terms of employment. Aside from Walmart, it is the largest employer of labor in the United States.
Now, in a move that some people have termed to be a direct challenge to Walmart by Amazon, the company acquired Whole Foods Market. This move which cost the brand $13.4 billion turned out to increase Amazon’s physical presence as a brick and mortar store very greatly.
Now, this is a fantastic place to ask.
How On Earth Did Amazon Get Here In Just 23 Years?!
The Story of Amazon Begins:
Here is a nice infographic narrating the story of Amazon.
Before we get to the story of Amazon, let’s get to know a little more about its owner, Jeff Bezos.
The Man, Jeff Bezos
Jeff was barely a year and a half old when his parents’ marriage ended. However, by the time he was four, his mother, Jacklyn Jorgensen, remarried his stepfather, a Cuban immigrant whose name was Mike Bezos.
After the marriage, the new family relocated from New Mexico to Texas where Jeff completed his elementary and high school education at River Oaks Elementary School (Houston), and Miami Palmetto Senior High School. Jeff would then go on from there to the prestigious Princeton University where he earned a degree in electrical engineering and computer science in 1986.
Jeff’s very first employment after graduation was at Intel and Bell Labs. From then on, he went on to Bankers Trust, and finally, before he left to build his own company, D.E Shaw & Co.
By the time the Amazon owner was 30 (1994), he was already earning a salary in 6 figures. Plus, being the vice president of the company, Jeff, who seems to have a knack for breaking records, also became the youngest ever senior vice president on record.
The Birth Of A Big Idea
The idea for Amazon came while Jeff was still serving as Senior Vice President at D.E Shaw & Co. The internet was relatively new then, (it was 1994 after all), and its novelty intrigued Jeff. So, he decided to cash in on it.
In fact, so pumped was he that he decided to quit his lucrative job to build his startup with no assurance whatsoever that he was going to succeed.
Here’s an excerpt of what he had to say concerning the birth of his brainchild in his address at an engagement in Princeton, 2010.
“I came across the fact that web usage was growing at 2,300% per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles – something that simply couldn’t exist in the physical world – was very exciting to me. I told my wife, MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most startups don’t, and I wasn’t sure what would happen after that. After much consideration, I took the less safe path to follow my passion, and I am proud of that choice”.
And So The Journey Began
After leaving New York, Jeff and his wife moved to Seattle, Washington. He then began to draw the business plans for Amazon, even though that wasn’t the initial name of the company.
The first name Jeff chose to go for when he initially incorporated his company on the 5th of July 1994 was Cadabra Inc.
Terrible choice, isn’t it? Wait until you hear that a certain lawyer, a few months later, misheard the name as “cadaver”. Nuff said.
Long story short, he had to change the name. And in 1995, Amazon went online.
However, before then, Bezos had already purchased a URL called “Relentless.com”. But, then he decided to change the name after a few close folks told him it sounded sinister.
But Why Books Though?
Jeff didn’t just set out to sell books because he’s a voracious reader. There was a more calculated reason behind it.
Before launching the platform, he drew out a list of 20 marketable products online, and afterward, narrowed the list down to five of what he believed were the most promising products. These products included compact discs, videos, computer software, computer hardware, and of course, books. However, books won with Jeff due to their high demand worldwide, inexpensiveness, and the availability of tons of books in print.
And so it was that the very first book sold on Amazon was Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms by Douglas Hofstadter.
In the two months that followed that sale, sales went up to about $20,000 per week. Also, the company began to sell to all states in the country and more than 45 other countries as well.
Growth And Expansion
From then on, things only got better for Amazon. Sales increased to the tune of 3000% every year, which made it the number three bookseller in the world.
This most likely encouraged the thriving entrepreneur as he (along with his team) decided to expand into other commodities besides books. So, they delved into gift items, pharmaceutical products, music, and clothing.
And then in 2002, the brand launched its subsidiary brand which it called Amazon Services. With Amazon Services, customers were able to order goods directly from their favorite brands like Toys ‘R Us and Borders.
Ultimately, by 2004, Amazon had become the number one retail platform in the market. The platform now carried practically everything sellable from books to electronics, to CDs, to clothing. Revenues increased stratospherically to about $6.9 billion, and then by 2005, the revenue added another $1.6 billion.
As the decade grew, Amazon also grew. The brand continued to add more products and services to what it offered. For instance, it introduced Prime, a Premium membership for its most loyal users that gave them access to some special deals on Amazon; Kindle Fire which was supposed to be a low-end alternative for those who couldn’t afford iPad; and also free two-day shipping.
Two Hiccups… And A Breakthrough…
When Jeff Bezos drew up his plans, he clearly stated that he didn’t expect to profit from Amazon within the next four to five years. Naturally, a lot of stockholders were skeptical about putting money into the business with this kind of projection.
To make matters worse, “dot.com” blew over in the early 2000’s, but luckily, Amazon rose from the ashes. And it didn’t just rise, it rose like a Phoenix. Amazon became one of the biggest online retail players and, in fact, turned an impressive profit of $1 million in revenues totaling more than $1 billion.
This was barely a year after the dot.com shebang.
Skeptics, of course, bought it and were able to finally agree that maybe this Bezos’ unconventional business model might just work.
Mergers, Acquisitions And The Future
The first company acquired by Amazon was PlanetAll, a Cambridge reminder service, in 1998. In the years to come, Amazon also purchased Pets.com, Gear.com, Shopbop, Goodreads, and its latest baby, Ring. Bezos himself has also invested in Basecamp and Twitter too.
Of course, the future is anything but bleak for this e-commerce giant.
By 2020, the company will be breaking grounds for a new building in downtown Seattle which would have a space for a local charity – Mary’s Place. We should also expect to see more mergers and of course more strides.
Certainly, the genesis and trail to stardom of the largest (online) retailer the world has ever seen is something that already features in many marketing books.
But it would be a gross oversimplification to say that the story of Amazon is an inspiration. Granted, going from a garage to the top of the business world sounds dreamy, but nobody – besides the people involved – knows the blood and sweat involved, the occasional stroke of luck, the ruthless decisions and the sleepless nights it takes to achieve that.
Besides, the Amazon story is far from over. Who knows how the giant will mold our future?
Note: This is a guest post by Josh Wardini. If you have excellent content to contribute, follow our guest blogging guidelines.