Amazon is a company that has an extremely diversified business model. However, the Amazon online store is the most prominent revenue generator of the company. According to the stats of 2018, around 52% of the total revenue generated by Amazon has come from the online store. Then you can find Amazon offering many other services, including a physical store. The Amazon Web Service subscription service and advertising plan have also received lots of positive attention.
History of Amazon
Amazon started its business operations back in the year 1994. In fact, the company started as a bookstore. Along with time, Amazon expanded its business operations to become a store that offers everything to people. In the meantime, Amazon focused on being an online store and restricted its core business operations around that. Along with that, Amazon also launched physical stores. These physical stores could generate total revenue of over five billion dollars in the year 2017.
Understanding the Amazon business model
As you already know, Amazon has got the biggest marketplace that you can find out there in the world. The United States is the primary customer group for Amazon. However, Amazon is expanding all around the world along with time. Due to this expansion, net sales made by the company have increased sharply from the year 2014. As per the statistics of 2016, around 70% of the sales made by Amazon came from the online store. However, sales that Amazon is making from offering its services are significantly increasing.
Amazon’s growth in revenue
It is worth looking at how the revenue of Amazon is growing along with time. If you look at the figures calculated during the past five years, you will notice that the total number of sales made by the company has been increased by 160%. In fact, the company could generate a total sales revenue worth $232.88 Billion within the year 2018. Back in the year 2014, it was just $89 Billion. These numbers clearly show Amazon’s success has been able to secure within a short period of time. Compared to the stats of 2017, Amazon has experienced a growth of 31% within 2018.
The main reason for the increase of revenue in Amazon is because they expanded business operations to more markets. They could do that with ease due to the presence of well-defined e-commerce business models. This helped Amazon to increase the customers and sales numbers. As a result, revenue generated by Amazon eventually increased. In the meantime, Amazon Web Services is strongly supporting the revenue made by the company as well.
As of now, Amazon is putting equal efforts into enhancing the business operations of three different segments. They include the international market, North American market, and AWS. The products and services offered by Amazon are available for sellers, consumers, content creators, enterprises, and developers.
Products and services offered by Amazon
As mentioned earlier, Amazon has a diversified business model. Along with that, it is worthy of looking at the products and services offered by Amazon, which contribute a lot towards the success that it makes.
Amazon online store
Amazon’s online store is the most prominent service offered by Amazon. It started with the initiative of selling books online. However, now you will be able to visit the Amazon store and purchase anything that you want. Amazon store is now available for people in a large number of countries as well. It is expanding exponentially.
Amazon is heavily investing in drones and robotics technologies. They even have a massive warehouse, which contains more than 45,000 robots. The main objective of investing in robotics is to get them into product delivery, which can cut down expenses and increase productivity in the long run.
Amazon is creating smart homes with the help and support of Amazon Alexa. One of the benefits of Amazon Alexa is that it is powered up with artificial intelligence. In addition to that, Amazon has got into a partnership with Microsoft to deliver the best out of it. You will also discover a dedicated Amazon research center in Germany, which focuses on offering the best of artificial intelligence.
Amazon Go is the most advanced physical store that you can find out there in the world. When you walk into an Amazon Go store, you will not be able to find a physical checkout point. In other words, no cashier will help you make the payments for the goods you buy. Instead, you will be able to notice how payments are added automatically when you take a product from the shelves. The payment will be deducted from your digital wallet or the Amazon account.
Amazon plays a dominating role in the cloud computing space through Amazon web services. In the year 2017, Amazon purchased several cloud computing companies to enhance the cloud computing solutions offered. In addition to that, Amazon has invested massively in Grail, which can benefit customers of Amazon Web Services in the future.
Amazon Prime Video
Amazon has already started investing in offering on-demand TV services to the people as well. You will be able to get that through Amazon Prime Video. It is competing with other streaming services, such as Hulu, HBO, and Netflix.
That’s where Amazon Studios was created. Along with Amazon’s success from its streaming services, Amazon thought of producing its own content. As of now, Amazon Studios is focusing on creating English Content.
As you can see, Amazon has got one of the most diverse business models. This diverse business model is continuously expanding as well. It can definitely help Amazon to sustain its business operations in the future as well.