The company originally began as an online bookstore as Bozos felt there was a high demand for literature, and books had a low price point and a huge selection of titles available in print. Technological innovation drives the growth of Amazon. Mom to offer customers more types of products, more conveniently and at lower prices. Since 1995, Amazon has significantly expanded its product selection, international retail websites, and worldwide network of fulfillment and customer service centers. Today, Amazon retail websites offer everything from toys and video games to MPH downloads and collectible items (Amazon. Com, 2014). Amazons business model is fairly simple; to sell various products and goods online at an affordable cost to consumers.
Amazon has managed to not only achieve this business model but they have also managed to consistently expand and become the largest online retailer to date. To keep up with global demand, Amazon had to expand its products and services offered while continuing to forecast consumer’s needs. “In 2000, Amazon. Com began to offer its best-of-breed e-commerce platform to other retailers and to individual sellers. Today, hundreds of thousands of world-class retail brands and individual sellers increase their sales and reach new customers by leveraging the power of the Amazon. Mom e- commerce platform. Partners work with Amazon Services to power their e-commerce offerings from end-to-end, including technology services, orchestrating, customer service, and order fulfillment. Other branded merchants leverage Amazon. Com as an incremental sales channel for their new merchandise. Over 2 million third-party sellers participate in Amazon where they offer new, used, and collectible selections at fixed prices to Amazon customers around the world” (Amazon. Com, 2014). Amazon doesn’t stock everything that is sold through its website.
Another part of its retail strategy is to serve as the channel for other retailers to sell their products and taking a cut of every purchase. Amazon maintains its status as a destination website, but does not have to maintain inventory on slower-selling products. This strategy has made Amazon a leading long-tail retailer, expanding its available selection without a corresponding increase in overhead costs (Eric Noreen, 2013). Amazon has managed to exercise the SCM strategy of forecasting consumer demand by offer the best of what each industry has to offer in retail format.
Currently a consumer has the ability to shop for almost anything in one online location, Amazon. Com. Amazon has also expanded their brand based off of their reductions of consumer demand in the form of their most recent platforms Amazon Prime and Amazon Fresh. Amazon has also managed to corner the consumer market in the development on production of Amazon kindle, Amazon MPH, and Amazon Games. Amazon continues to drive innovation by empowering content creators as well as consumers and sellers.
Kindle Direct Publishing and Amazon Publishing give authors innovative means to bring books to readers. Amazon Studios developing feature films and episodic series in a new way, one that’s open to great ideas from creators and audiences around the world. Crawlspace makes it simple to print and distribute books, music, and video through Internet retail outlets, personal websites, bookstores, retailers, libraries, and academic institutions–on-demand (Amazon. Com, 2014). Price is an important factor in the overall SCM strategy for Amazon.
Online retail is a large industry and offering the right prices to consumers is one of the key ways to remain on top. Amazon works with its merchants to offer low prices to the online consumer and to attract high consumer traffic. Amazon also offers price promotions and discounts through the Amazon prime program by offering ere two day shipping and discounted one day shipping to its members. The Amazon value propositions of price and convenience hold true in all of its product categories, allowing it to extend itself into new markets and deepen its customer relationships.
The company has dominated online retail with a fairly standard traditional retail business model over the internet, using its buying power and financial resources to dominate the marketplace (Eric Noreen, 2013). Amazon will continue to strive and flourish in the retail market by continuing to utilize a SCM strategy that works. As Amazon has already proven, forecasting consumer demand, streamlining cost, and offering price promotions are key ways to ensure success. Continuing to provide a large variety of goods and services, while expanding into new markets will also allow Amazon to continue to have global success.