December 5, 2019

How Amazon Started, Grew and Became A Trillion Dollars Company


How Amazon Started, Grew and Became A Trillion
Dollars Company Amazon.com Inc, popularly known as Amazon
was founded by Jeff Bezos, an American entrepreneur. Amazon started out as an online bookstore
but is now a multinational company and the largest e-commerce marketplace and cloud computing
platform in the world with a revenue upwards of $177 billion in 2017. How Amazon Started In 1994, Bezos quit his job as vice president
of D.E Shaw & Co, a Wall Street firm and relocated to Seattle Washington where he devised a business
plan for a new company. This move was fueled in part by his regret
for not taking part in the internet business boom at the time. On July 1994, Bezos named his new company
Cadabra Inc. but it was quickly discarded when Bezos’ lawyer disclosed that he misheard
the name as “Cadaver” over the phone. By September 1994, Bezos toyed with the name
“Relentless” which was also scrapped because friends told him the name sounded sinister. The Relentless domain is still owned by Bezos
and redirects to the current website. Eventually, Bezos settled on the name “Amazon”,
an authoritative name that referenced the largest river basin in the world. This reference also represented his vision
of making the company the biggest in the world. Its launch tagline was “Earth’s Biggest
Bookstore.” He once 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.” Bezos did his research on the future of the
internet that predicted the growth of annual web commerce at 2300% so he created a list
of products that could be marketed online and narrowed it down to what he believed would
be the most promising. These products included compact discs, computer
hardware, and software, videos and books. In the end, he decided that because of the
enormous worldwide demand for literature, the low unit prices for books and a large
number of books available in print, his new business would sell books online. Bezos invested almost $250,000 to start up
Amazon in the garage of his rented house in Bellevue, Washington. The First Book Sold In July 1995, Amazon sold its first book,
Douglas Hofstadter’s Fluid Concepts and Creative Analogies: Computer Models of the Fundamental
Mechanisms of Thought and in the next two months sold to all 50 states in the US and
more than 45 countries with sales up to $20,000 each week. By October the same year, Amazon announced
its intention to go public. When eBay was established in 1995, Amazon
tried to compete with its own auction site. The project failed but Bezos was not unhappy. He bought the skeleton of an Ice Age cave
bear for $40,000 and had it displayed in the entrance hall of the company headquarters
next to a sign that read, “Please Don’t Feed The Bear.” The sign is still there till date. In 1996, Amazon was reincorporated in Delaware
and its employee count went up to 11 which prompted its move out of Bezos’ garage into
a small warehouse that would become its second official headquarters. Amazon Went Public On May 1997, Amazon issued its first public
stock offering at $18 per share. Around this time, Amazon was sued by Barnes
& Noble who declared that Amazon’s claim to be “the world’s largest bookstore”
was unfounded as it “…isn’t a bookstore at all. It’s a book broker.” The suit was subsequently settled out of court
and Amazon continued to make the claim. In October 1998, Amazon was sued by Walmart
who claimed that Amazon stole Walmart trade secrets by employing former Walmart executives. This suit was also settled out of court but
Amazon had to put internal restrictions in place as well as the reassignment of the former
Walmart officers. In the same year, Amazon went on to take over
companies such as Drugstore.com, Pets.com, and Overstock.com. In 1999, Amazon attempted to branch out into
the publishing business by buying a discontinued imprint, “Weathervane” a trade name under
which it would publish books. According to The New Yorker, an American magazine,
the books the company published were “selected with no apparent thought”. The imprint disappeared soon after and by
2014 Amazon agents conveyed that they had never even heard of it. Also in 1999, Amazon’s online shopping gained
national spotlight and recognition when Bezos was named the “Person of the Year” by
Time magazine for successfully popularizing cybershopping. Amazon in the New Century In June 2000, Amazon updated its logo to include
the curved arrow, shaped like a smile moving from the A to the Z that is popular around
the world today. It was also at this time that the online platform
started offering free shipping on orders above $100 and the platform opened up to accept
third-party sellers. Some sources claim that Amazon had not expected
to make profits for at least four years, a sluggish growth that caused shareholders to
complain that the company’s profitability was not fast enough to justify their investments
in the long term. The internet bubble burst that occurred roughly
from 1995 to 2000 as a result of the extreme growth in the usage and adjustment to the
internet destroyed many e-companies. However, Amazon survived this bleak period
and moved on to become a huge participant in online sales. Towards the end of 2001 Amazon finally turned
its first profit of $5 million at 1¢ per share on revenue of over $1 billion which
was extremely little but it proved that Bezos’ unorthodox model of business could actually
succeed. Between 2001 and 2011, Amazon experienced
rapid growth. In 2002, the Amazon Web Services was launched
for developers to include features of Amazon.com into their own websites. In that same year, Bezos launched the concept
of “two-pizza teams” to the company. It was a concept that involved organizing
employees into groups consisting of less than ten people – the ideal amount that would
be satisfied by two pizzas for dinner – who were expected to work independently. The teams were given strict goals and equations
were used to measure their success. Bezos once said, “Communication is a sign
of dysfunction. It means people aren’t working together in
a close, organic way. We should be trying to figure out a way for
teams to communicate less with each other, not more.” It was a widely hated concept among the Amazon
employees due mostly to the stress involved. In 2004 Amazon’s online shopping sales finally
surpassed the book sales for the first time in the history of the company. In 2005 the now extremely popular membership
program, the Amazon Prime was launched. In 2007 Amazon launched new services like
the home grocery delivery service, the online music store and the now-famous electronic
reader. They were labeled AmazonFresh, Amazon Music,
and Amazon Kindle respectively. In 2008 Amazon released a search feature that
costumers would pay for which allowed advertisers to direct Amazon traffic to their own sites. This feature was named Product Ads. Amazon in Recent Years
In 2010, the Kindle electronic books sales finally exceeded that of printed books for
the first time in the history of the company. By 2011, Amazon had grown to be an employer
of up to 30,000 full-time employees and at the end of 2017; the number had skyrocketed
to 566,000 worldwide. In June 2017, Amazon announced its intention
to use $13.4 billion to acquire Whole Foods; an extravagant supermarket chain with more
than 400 stores, a move that media experts figured would strengthen its physical presence. By August the acquisition was approved. As of August 2018, Amazon owns a 5% share
of retail spending in the US as well as a 43.5% share of online spending with a net
income upwards of $3 billion. As at 2018, Amazon net worth was valued at
$1 Trillion making it the second company in the world to reach that mark. Thank you very much for watching our videos. We’ll like to give you another interesting
video for you to enjoy next but before then, our team will be very happy if you can like
this video and share it with your friends on social media. If you’re new here, don’t forget to subscribe
so you won’t miss other interesting videos like this. Look at your screen now to see two other videos
we handpicked for you to enjoy next. We love you

Leave a Reply

Your email address will not be published. Required fields are marked *