The Internet’s popularity as a platform for small businesses and firms to advertise and sell their products has led to the need for effective marketing ideas. Amazon.com, an online company that gained nationwide recognition and experienced rapid growth, has played a key role in paving the way for competitive business in specialized industries.
Amazon.com, a multinational corporation in the retail industry, has multiple shareholders who own stock. Stock ownership has been vital for expanding the business and supporting capital investments. With its online platform, Amazon.com has a global presence that enables individuals from any location to access and utilize the website as long as they have an Internet connection. In July 1995, Jeff P. Bezos and his wife established Amazon.com at their residence in Seattle, Washington. Bezos, a 34-year-old Princeton University graduate who has lived and worked in Miami and Houston, initiated the establishment of Amazon.com.
Originally starting as a small online bookstore, Amazon.com quickly expanded into a large corporation that generates substantial revenue and satisfies customers with its popular and easily accessible products. Although Jeff Bezos is the primary CEO and visionary of the company, Amazon.com is partially owned by stockholders, which provides an advantage in terms of financial liability. As a corporation, stockholders are not held financially responsible for any business failures.
However, one drawback faced by Amazon.com is government regulation. Additionally, due to its rapid growth, the company experiences a significant increase in operating expenses, growing at approximately 25% annually.
Similar to any other corporation, Amazon.com faces tough competition from well-known businesses such as Barnes & Nobles, CdNow.com, and Ebay.com. In fact, Barnes & Nobles—an influential bookstore and music retailer—was even sued by Amazon.com for copying market ideas at one point and emerged as a major competitor.
CdNow.com operates similarly to Amazon.com as it sells music through the internet and offers stock shares to the public; however,it has a smaller scope of operation.On the other hand,Ebay.com surpasses Amazon.com in size and provides various live auctions and bidding options for customers.
Amazon.com is an e-commerce website that offers a wide variety of products including books, music, electronics, software, and home improvement items like lawn and garden supplies. Despite economic difficulties, the company has around 7,500 employees and continues to hire more. Additionally, Amazon.com remains a nonunionized corporation and is projected to remain so in the future. On the NASDAQ stock market, Amazon.com’s trading symbol is AMZN.
Amazon.com has extended its business by launching or acquiring various subsidiaries, including the Internet Movie Database (www.imd.com), LiveBid.com, and PlanetAll.com. Moreover, it merged with Pets.com, Ashford.com, and Gear.com – recognized as conglomerates due to their varied product offerings in contrast to Amazon.com. Unfortunately, these entities underwent a noteworthy decrease in stock price from $63.5625 to $46.875 per share within a span of ten days, resulting in a substantial loss of approximately $20 per share.
Economic profits occur when the total revenue is greater than the total cost.
2) The normal rate of return is achieved when the total revenue equals the total cost.
When the total revenue is less than the total costs, negative profits occur.
Amazon.com is a highly successful online business that generates economic profits by earning more revenue than its combined resource and staff costs. It holds the 35th position on the Fortune 500 list for Specialty Retailers, with a revenue of $1,640,000,000. The top four companies in this industry are Home Depot, Costco Wholesale, Lowe’s, and Toys ‘r Us. The market concentration ratio stands at 35%, indicating competition with differentiation. Amazon.com has effectively created a new market for book, magazine, CD, and other product sales through its online services and prominent presence in cyberspace. By offering a wide range of products accessible with just one click, it has led to the emergence of numerous competitive businesses within the online retail sector. However, being a relatively new market necessitates adjustments to cater to the unique needs of this industry. In the future, more companies like Amazon.com can be expected to rise on the Internet as they continue innovating and finding novel ways to meet customer satisfaction.
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