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Why is So Successful in Online Retail?

Why is So Successful in Online Retail?
Amazon was founded in 1995, spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush. Company lore says Bezos wrote the business plan while he and his wife drove from New York to Seattle, although that account is disputed. Bezos flew from New York to Texas, where he picked up a car from a family member, and then drove from Texas to Seattle.

The company began as an online bookstore; while the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an online bookstore could offer more. Bezos wanted a name for his company that began with "A" so that it would appear first in lists, like in phone books. He began looking through the dictionary and settled on "Amazon" because it was a place that was "exotic and different" and the river he considered the biggest in the world, like he hoped his company would be. Since 2000, Amazon's logotype is an arrow leading from A to Z, representing customer satisfaction (as it forms a smile); a goal was to have every product in the alphabet.

Amazon's initial business plan was unusual: the company did not expect a profit for four to five years. Its "slow" growth provoked stockholder complaints that the company was not reaching profitability fast enough. When the dot-com bubble burst, and many e-companies went out of business, Amazon persevered, and finally turned its first profit in the fourth quarter of 2001: $5 million or 1˘ per share, on revenues of more than $1 billion, but the modest profit was important in demonstrating the business model could be profitable. In 1999, Time magazine named Bezos Person of the Year, recognizing the company's success in popularizing online shopping.

Founder and CEO, Jeff Bezos

After graduating from Princeton University in 1986, Bezos worked on Wall Street in the computer science field. Then he worked on building a network for international trade for a company known as Fitel. Then Bezos worked for Bankers Trust, becoming a vice-president. Later on he also worked in computer science for D. E. Shaw & Co.

Bezos founded in 1994 after making a cross-country drive from New York to Seattle, writing up the Amazon business plan on the way and originally setting up the company in his garage. His work with Amazon eventually led him to become one of the most prominent dot-com entrepreneurs and a billionaire. In 2004, he founded a human spaceflight startup company called Blue Origin.

Bezos' salary as CEO for 2010 was only $81,840, in addition to the $1.6 million cost of his personal security detail. He owns 20% of Amazon's stock and foregoes stock options. Bezos is known for his attention to business-process details. As described by Condé Nast's, he "is at once a happy-go-lucky mogul and a notorious micromanager. ... an executive who wants to know about everything from contract minutiae to how he is quoted in all Amazon press releases.

Amazon's Rapid Growth

One of the hallmarks of Amazon is its steady growth execution that have built this company into one of the internet retail powerhouse that it is today. Here are some of the strategic expansions and acquisition by Amazon over the years.


1998:, a UK online book retailer, which became Amazon UK on October 15, 1998. 1999: Internet Movie Database (IMDb). Cambridge, Massachusetts-based PlanetAll, a reminder service; Sunnyvale-based, an XML-based data mining startup Alexa Internet,, and 2003: online music retailer CD Now. 2004:, a Chinese e-commerce website. 2005: BookSurge, a print on demand company, and, an eBook software company. (formerly CustomFlix), a Scotts Valley, California-based distributor of on-demand DVDs. CreateSpace has since expanded to include on-demand books, CDs, and video. 2006: Shopbop, a Madison, Wisconsin-based retailer of designer clothing and accessories for women. 2007:, a London-based digital photography review website; Brilliance Audio, the largest independent publisher of audiobooks in the United States.[25] 2008:;; Box Office Mojo; AbeBooks; Shelfari; (including a 40% stake in LibraryThing and whole ownership of,, and FillZ); Reflexive Entertainment, a casual video game development company. 2009: Zappos, an online shoe and apparel retailer, Lexcycle 2010: Touchco., Woot, Quidsi, Buyvip, Amie Street. 2011: Lovefilm, The Book Depository, Pushbutton


2008: Engine Yard, a Ruby-on-Rails platform-as-a-service (PaaS) company. 2010: LivingSocial, a local deal site.


2004:, a company focused on researching and building innovative technology. 2004: Lab126, developers of integrated consumer electronics such as the Kindle. 2007:, an e-commerce brand focusing on shoes.

Merchant partnerships

The website CDNOW is managed by Amazon. Until June 30, 2006, typing into a browser would similarly bring up'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 its inception until August 2011, Amazon hosted the retail website for Target. powers and operates retail web sites for Sears Canada, Benefit Cosmetics, bebe Stores, Timex, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity,, and Mothercare, Amazon provides a unified multichannel platform where a customer can seamlessly interact with some people that they call the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.

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