How Amazon Started, Grew and Became A TrillionDollars Company Amazon.
com Inc, popularly known as Amazonwas founded by Jeff Bezos, an American entrepreneur.
Amazon started out as an online bookstorebut is now a multinational company and the largest e-commerce marketplace and cloud computingplatform in the world with a revenue upwards of $177 billion in 2017.
How Amazon Started In 1994, Bezos quit his job as vice presidentof D.
E Shaw & Co, a Wall Street firm and relocated to Seattle Washington where he devised a businessplan for a new company.
This move was fueled in part by his regretfor not taking part in the internet business boom at the time.
On July 1994, Bezos named his new companyCadabra Inc.
but it was quickly discarded when Bezos’ lawyer disclosed that he misheardthe 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 Bezosand 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 visionof making the company the biggest in the world.
Its launch tagline was “Earth’s BiggestBookstore.
” He once told a reporter, “There’s nothingabout our model that can’t be copied over time.
But you know, McDonald’s got copied.
And it’s still built a huge, multibillion-dollarcompany.
A lot of it comes down to the brand name.
Brand names are more important online thanthey are in the physical world.
” Bezos did his research on the future of theinternet that predicted the growth of annual web commerce at 2300% so he created a listof products that could be marketed online and narrowed it down to what he believed wouldbe the most promising.
These products included compact discs, computerhardware, and software, videos and books.
In the end, he decided that because of theenormous worldwide demand for literature, the low unit prices for books and a largenumber of books available in print, his new business would sell books online.
Bezos invested almost $250, 000 to start upAmazon 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 FundamentalMechanisms of Thought and in the next two months sold to all 50 states in the US andmore than 45 countries with sales up to $20, 000 each week.
By October the same year, Amazon announcedits intention to go public.
When eBay was established in 1995, Amazontried to compete with its own auction site.
The project failed but Bezos was not unhappy.
He bought the skeleton of an Ice Age cavebear for $40, 000 and had it displayed in the entrance hall of the company headquartersnext to a sign that read, “Please Don’t Feed The Bear.
” The sign is still there till date.
In 1996, Amazon was reincorporated in Delawareand its employee count went up to 11 which prompted its move out of Bezos’ garage intoa small warehouse that would become its second official headquarters.
Amazon Went Public On May 1997, Amazon issued its first publicstock 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 courtand Amazon continued to make the claim.
In October 1998, Amazon was sued by Walmartwho claimed that Amazon stole Walmart trade secrets by employing former Walmart executives.
This suit was also settled out of court butAmazon had to put internal restrictions in place as well as the reassignment of the formerWalmart officers.
In the same year, Amazon went on to take overcompanies such as Drugstore.
com, and Overstock.
In 1999, Amazon attempted to branch out intothe publishing business by buying a discontinued imprint, “Weathervane” a trade name underwhich 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 by2014 Amazon agents conveyed that they had never even heard of it.
Also in 1999, Amazon’s online shopping gainednational spotlight and recognition when Bezos was named the “Person of the Year” byTime magazine for successfully popularizing cybershopping.
Amazon in the New Century In June 2000, Amazon updated its logo to includethe curved arrow, shaped like a smile moving from the A to the Z that is popular aroundthe world today.
It was also at this time that the online platformstarted offering free shipping on orders above $100 and the platform opened up to acceptthird-party sellers.
Some sources claim that Amazon had not expectedto make profits for at least four years, a sluggish growth that caused shareholders tocomplain that the company’s profitability was not fast enough to justify their investmentsin the long term.
The internet bubble burst that occurred roughlyfrom 1995 to 2000 as a result of the extreme growth in the usage and adjustment to theinternet destroyed many e-companies.
However, Amazon survived this bleak periodand moved on to become a huge participant in online sales.
Towards the end of 2001 Amazon finally turnedits first profit of $5 million at 1¢ per share on revenue of over $1 billion whichwas extremely little but it proved that Bezos’ unorthodox model of business could actuallysucceed.
Between 2001 and 2011, Amazon experiencedrapid growth.
In 2002, the Amazon Web Services was launchedfor developers to include features of Amazon.
com into their own websites.
In that same year, Bezos launched the conceptof “two-pizza teams” to the company.
It was a concept that involved organizingemployees into groups consisting of less than ten people – the ideal amount that wouldbe satisfied by two pizzas for dinner – who were expected to work independently.
The teams were given strict goals and equationswere used to measure their success.
Bezos once said, “Communication is a signof dysfunction.
It means people aren’t working together ina close, organic way.
We should be trying to figure out a way forteams to communicate less with each other, not more.
” It was a widely hated concept among the Amazonemployees due mostly to the stress involved.
In 2004 Amazon’s online shopping sales finallysurpassed the book sales for the first time in the history of the company.
In 2005 the now extremely popular membershipprogram, the Amazon Prime was launched.
In 2007 Amazon launched new services likethe home grocery delivery service, the online music store and the now-famous electronicreader.
They were labeled AmazonFresh, Amazon Music, and Amazon Kindle respectively.
In 2008 Amazon released a search feature thatcostumers would pay for which allowed advertisers to direct Amazon traffic to their own sites.
This feature was named Product Ads.
Amazon in Recent YearsIn 2010, the Kindle electronic books sales finally exceeded that of printed books forthe first time in the history of the company.
By 2011, Amazon had grown to be an employerof up to 30, 000 full-time employees and at the end of 2017; the number had skyrocketedto 566, 000 worldwide.
In June 2017, Amazon announced its intentionto use $13.
4 billion to acquire Whole Foods; an extravagant supermarket chain with morethan 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% shareof retail spending in the US as well as a 43.
5% share of online spending with a netincome 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.
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