AMAZON WORLD RICHEST MAN EMPIRE
- 1 AMAZON WORLD RICHEST MAN EMPIRE
- 1.1 Board of directors
- 1.2 Merchant partnerships
- 1.3 Products and services
- 1.4 Subsidiaries
- 1.4.1 A9.com
- 1.4.2 Amazon Maritime
- 1.4.3 Audible.com
- 1.4.4 Beijing Century Joyo Courier Services
- 1.4.5 Brilliance Audio
- 1.4.6 ComiXology
- 1.4.7 CreateSpace
- 1.4.8 Goodreads
- 1.4.9 Lab126
- 1.4.10 Shelfari
- 1.4.11 Twitch
- 1.4.12 Whole Foods Market
- 1.4.13 Junglee
- 1.4.14 Reviews
- 1.4.15 Content search
- 1.4.16 Third-party sellers
- 1.5 Amazon sales rank
- 1.6 Technology
- 1.7 Multi-level sales strategy
- 1.8 Revenue
- 1.9 October 2018 wage increase
- 1.10 Controversies
- 1.11 Lobbying
- 1.12 Notable businesses founded by former employees
The company was founded as a result of what Jeff Bezos called his “regret minimization framework,” which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time. In 1994, Bezos left his employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and moved to Seattle, Washington, where he began to work on a business plan for what would become Amazon.com.
On July 5, 1994, Bezos initially incorporated the company in Washington State with the name Cadabra, Inc. He later changed the name to Amazon.com, Inc. a few months later, after a lawyer misheard its original name as “cadaver”. In September 1994, Bezos purchased the URL Relentless.com and briefly considered naming his online store Relentless, but friends told him the name sounded a bit sinister. The domain is still owned by Bezos and still redirects to the retailer.
Choosing a name
Bezos selected the name Amazon by looking through the dictionary; he settled on “Amazon” because it was a place that was “exotic and different”, just as he had envisioned for his Internet enterprise. The Amazon River, he noted, was the biggest river in the world, and he planned to make his store the biggest bookstore in the world. Additionally, a name that began with “A” was preferential due to the probability it would occur at the top of an alphabetized list. Bezos placed a premium on his head start in building a brand and told a reporter, “There’s nothing about our model that can’t be copied over time. But you know, McDonald’s got copied. And it’s still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world.”
Online bookstore and IPO
After reading a report about the future of the Internet that projected annual web commerce growth at 2,300%, Bezos created a list of 20 products that could be marketed online. He narrowed the list to what he felt were the five most promising products, which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, due to the large worldwide demand for literature, the low price points for books, along with the huge number of titles available in print. Amazon was founded in the garage of Bezos’ rented home in Bellevue, Washington. Bezos’ parents invested almost $250,000 in the start-up.
In July 1995, the company began service as an online bookstore. The first book sold on Amazon.com was Douglas Hofstadter‘s Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon’s sales were up to $20,000/week. In October 1995, the company announced itself to the public. In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, at $18 per share, trading under the NASDAQ stock exchange symbol AMZN.
Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon’s claim to be “the world’s largest bookstore” was false because it “…isn’t a bookstore at all. It’s a book broker.” The suit was later settled out of court and Amazon continued to make the same claim. Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen Walmart’s trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the reassignment of the former Walmart executives.
In 1999, Amazon first attempted to enter the publishing business by buying a defunct imprint, “Weathervane”, and publishing some books “selected with no apparent thought”, according to The New Yorker. The imprint quickly vanished again, and as of 2014 Amazon representatives said that they had never heard of it. Also in 1999, Time magazine named Bezos the Person of the Year when it recognized the company’s success in popularizing online shopping.
Since June 19, 2000, Amazon’s logotype has featured a curved arrow leading from A to Z, representing that the company carries every product from A to Z, with the arrow shaped like a smile.
According to sources, Amazon did not expect to make a profit for four to five years. This comparatively slow growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long-term. The dot-com bubble burst at the start of the 21st century and destroyed many e-companies in the process, but Amazon survived and moved forward beyond the tech crash to become a huge player in online sales. The company finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos’ unconventional business model could succeed.
2010 to present
In 2011, Amazon had 30,000 full-time employees in the USA, and by the end of 2016, it had 180,000 employees.
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In June 2017, Amazon announced that it would acquire Whole Foods, a high-end supermarket chain with over 400 stores, for $13.4 billion. The acquisition was seen by media experts as a move to strengthen its physical holdings and challenge Walmart‘s supremacy as a brick and mortar retailer. This sentiment was heightened by the fact that the announcement coincided with Walmart’s purchase of men’s apparel company Bonobos. On August 23, 2017, Whole Foods shareholders, as well as the Federal Trade Commission, approved the deal.
In September 2017, Amazon announced plans to locate a second headquarters in a metropolitan area with at least a million people.Cities needed to submit their presentations by October 19, 2017 for the project called HQ2. The $5 billion second headquarters, starting with 500,000 square feet and eventually expanding to as much as 8 million square feet, may have as many as 50,000 employees. In 2017, Amazon announced it would build a new downtown Seattle building with space for Mary’s Place, a local charity in 2020.
According to an August 8, 2018 story in Bloomberg Businessweek, Amazon has about a 5 percent share of U.S. retail spending (excluding cars and car parts and visits to restaurants and bars), and a 43.5 share of American online spending in 2018. The forecast is for Amazon to own 49 percent of the total American online spending in 2018, with two-thirds of Amazon’s revenue coming from the U.S.
In November 2018, Amazon discussed about the possibility of opening its highly sought-after second headquarters in Crystal City, Virginia. Few of the public subsidies being offered to Amazon have been disclosed. Maryland has offered an incentive package worth an estimated $8.5 billion. The Newark, New Jersey subsidies are estimated at $7 billion.
On January 22, 2018, Amazon Go, a store that uses cameras and sensors to detect items that a shopper grabs off shelves and automatically charges a shopper’s Amazon account, was opened to the general public in Seattle. Customers scan their Amazon Go app as they enter, and are required to have an Amazon Go app installed on their smartphone and a linked Amazon account to be able to enter. The technology is meant to eliminate the need for checkout lines. Amazon Go was initially opened for Amazon employees in December 2016. By the end of 2018, there will be 8 total Amazon Go stores located in Seattle, Chicago, San Fransico and New York.Amazon has plans to open as many as 3,000 Amazon Go locations across the United States by 2021.
Amazon announced to debut the Amazon 4-star in New York, Soho neighborhood Spring Street between Crosby and Lafayette on 27 September 2018. The store carries the 4-star and above rated products from around New York. The amazon website searches for the most rated, highly demanded, frequently bought and most wished for products which are then sold in the new amazon store under separate categories. Along with the paper price tags, the online-review cards will also be available for the customers to read before buying the product.
Mergers and acquisitions
Amazon has grown through a number of mergers and acquisitions over the years.
The company has also invested in a number of growing firms, both in the United States and Internationally. In 2014, Amazon purchased top level domain .buy in auction for over $4 million. The company has invested in brands that offer a wide range of services and products, including Engine Yard, a Ruby-on-Rails platform as a service company, and Living Social, a local deal site.
Board of directors
As of May 2018, the board of directors is:
- Jeff Bezos, President, CEO, and Chairman
- Tom Alberg, Managing partner, Madrona Venture Group
- John Seely Brown, Visiting Scholar and Advisor to the Provost at University of Southern California
- Jamie Gorelick, partner, Wilmer Cutler Pickering Hale, and Dorr
- Daniel P. Huttenlocher, Dean and Vice Provost, Cornell University
- Judy McGrath, former CEO, MTV Networks
- Jon Rubinstein, former Chairman, and CEO, Palm, Inc.
- Thomas O. Ryder, former Chairman, and CEO, Reader’s Digest Association
- Patty Stonesifer, President, and CEO, Martha’s Table
- Wendell P. Weeks, Chairman, President, and CEO, Corning Inc.
Until June 30, 2006, typing ToysRUs.com into a browser would bring up Amazon.com’s “Toys & Games” tab; however, this relationship was terminated due to a lawsuit.Amazon also hosted and managed the website for Borders bookstores but this ceased in 2008. From 2001 until August 2011, Amazon hosted the retail website for Target.
Amazon.com operates retail websites for Sears Canada, Bebe Stores, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, including the UK merchants Marks & Spencer, Benefit Cosmetics’ UK entity, edeals.com and Mothercare, Amazon provides a unified multichannel platform where a customer can interact with the retail website, standalone in-store terminals or phone-based customer service agents. Amazon Web Services also powers AOL‘s [email protected]
On October 18, 2011, Amazon.com announced a partnership with DC Comics for the exclusive digital rights to many popular comics, including Superman, Batman, Green Lantern, The Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes & Noble to remove these titles from their shelves.
In November 2013, Amazon.com announced a partnership with the United States Postal Service to begin delivering orders on Sundays. The service, included in Amazon’s standard shipping rates, initiated in metropolitan areas of Los Angeles and New York due to the high-volume and inability to deliver timely, with plans to expand into Dallas, Houston, New Orleans and Phoenix by 2014.
In September 2017, Amazon ventured with one of its sellers JV Appario Retail owned by Patni Group which has recorded a total income of $104.44 Mn (INR 759 Cr) in financial year 2017-18.
Products and services
Amazon.com’s product lines available at its website include several media (books, DVDs, music CDs, videotapes and software), apparel, baby products, consumer electronics, beauty products, gourmet food, groceries, health and personal-care items, industrial & scientific supplies, kitchen items, jewelry, watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items and toys & games.
Amazon is now gearing up in India to play a role in the grocery retail sector aimed at delivering customer needs.
Amazon.com has a number of products and services available, including:
Amazon Maritime, Inc. holds a Federal Maritime Commission license to operate as a non-vessel-owning common carrier (NVOCC), which enables the company to manage its own shipments from China into the United States.
Audible.com is a seller and producer of spoken audio entertainment, information and educational programming on the Internet. Audible sells digital audiobooks, radio and TV programs and audio versions of magazines and newspapers. Through its production arm, Audible Studios, Audible has also become the world’s largest producer of downloadable audiobooks. On January 31, 2008, Amazon announced it would buy Audible for about $300 million. The deal closed in March 2008 and Audible became a subsidiary of Amazon.
Beijing Century Joyo Courier Services
Beijing Century Joyo Courier Services is a subsidiary of Amazon and it applied for a freight forwarding license with the US Maritime Commission. Amazon is also building out its logistics in trucking and air freight to potentially compete with UPSand FedEx.
Brilliance Audio is an audiobook publisher founded in 1984 by Michael Snodgrass in Grand Haven, Michigan. The company produced its first 8 audio titles in 1985. The company was purchased by Amazon in 2007 for an undisclosed amount. At the time of the acquisition, Brilliance was producing 12–15 new titles a month. It operates as an independent company