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Amazon® is one of the world’s largest online retailers. The company began with the idea of selling books on the Internet and has since expanded and evolved into a large shopping portal where customers are able to purchase products from a wide variety of brand name and smaller, independent retailers. The company’s websites around the world are now the first stop for many customers looking to purchase products on the Internet.
Amazon® was founded by Jeff Bezos in Bellevue, Washington in 1994 as a way to sell books to consumers online. It launched in 1995 and within its first month sold books throughout the United States and in approximately 40 countries around the world. In just a few months after its launch, Amazon® was consistently selling approximately 100 books per day online.
The initial success of Amazon® attracted investors who believed in the potential of the fledgling business. This infusion of capital allowed the company to improve and enhance its website and hosting capabilities, which in turn helped the company grow. It has often been mentioned that in the company’s early days the website was rather plain, not very user-friendly and the overall appearance of the site led to some customers having a negative impression of the company. The improvements created the desired effect and the company achieved close to $16 million U.S. Dollars (USD) in sales in 1997.
Another of the driving factors of the company's success was the feeling that customers had of belonging to an online community. Customers were able to post reviews of books that they had purchased and read other customers' reviews. The introduction of a recommended book feature was another key enhancement of the site. The website would showcase books that matched titles that customers had either recently purchased or viewed. Over time, this feature would to expand to offer recommendations based on what other customers had purchased.
The company became one of the prominent symbols of what became known as the “Dot Com Boom” of the late 1990s and in 1997 Amazon® went public and sold almost three million shares of common stock. Yet even amidst its sales success, the company had not earned a profit and in early 2001, they posted net losses of over $1 billion USD. This forced a restructuring and revamping of the company’s operations including creating strategic partnerships with major retailers and selling their products through Amazon®.com. The company also started an affiliate program where companies could place a link on their websites to Amazon®.com and receive a percentage from sales generated through the link.
The changes achieved the desired effect and by the end of 2001, Amazon® turned a profit of $5 million USD. By 2008 Amazon® generated sales of over $19 billion USD and earned a profit of approximately $645 million USD. From its humble beginnings in the home of founder Jeff Bezos, to becoming one of the largest online shopping websites in the world, it is clear that Amazon® has certainly come a long way.
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