Amazon: From An Online Book Store To A Trillion Dollar E-Commerce Giant

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Growth Story is a weekly podcast that breaks down the strategy and tactics utilized by high growth companies, in a short case study format hosted by Scott D. Clary (@scottdclary)

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Welcome to success story, the most useful podcast in the world. I'm your host, Scott Dclary. The success story podcast is part of the hub spot podcast network. The hub spot podcast network has other great podcasts you should go check out, like being boss, hosted by Emily Thompson. Now, with the holidays just around the corner, you're probably thinking what's next for you in the New Year. What other shows are you going to listen to to level yourself up? Well, on the success story podcast I interview a lot of entrepreneurs and I usually dive deep into the creative aspects of building a business. So if you are a creative a creative business owner, or you're thinking about eventually becoming one, which at some point everybody kind of has to be, because you have to be a little bit creative, and how you build a business, how you market a business, now you sell your product, all of that does require some creativity. But also for people that are hyper focused on the creative niche, you may be interested in being boss, hosted by Emily Thompson. Being boss is an exploration of not only what it means but...

...what it takes to be a boss as a creative business owner. If you are into some of the following topics, you're going to love this show. Project Management and building systems for creatives, freelancers or side Hustlers, opening a retail store, rituals that inspire and evoke creativity and taking time off as a business owner to focus on yourself, your creativity and upskilling. You need to listen to being boss. They cover all these topics and more. You can listen to being boss on any of your favorite podcasting platforms or at Hop spotcom podcast network. Today I'm going to speak about Amazon. It's a case study. I'm going to speak about Amazon's roots, from Jeff Bezos's garage all the way through to becoming a trillion dollar company. I'm going to speak about their strategy, how they grew, how they marketed themselves, how they focus on their customers, how they diversified, how they brought in partners, how they scaled. This is a business case study. This is Amazon's growth story.

Amazon from an online bookstore to a trillion dollar e commerce giant before blasting off into space. Jeff bezos was a regular guy. He had an office job that he hated. BEZOS was a former Wall Street hedge fund executive who analyze the greater possibilities of investment via the Internet, examining the trends that led him to realize there was vast potential for growth and sales on the web. So he did something that may or may not be the norm in the early days of the Internet. I know a lot of people jumped into startups, but he obviously was a success story as opposed to somebody that was just another casualty of thecom boom. He quit his job and let his entrepreneurial spark guide him to the development of one of the most successful companies in the world, Amazon, so, seeing how big the platform is now and how dependent we are on Amazon and virtually all aspects of our virtual lives and our work from home...

...lives and our obsession with e commerce and convenience, it is mind blowing to think about its beginning. So let's rewind. Let's go back to the beginning. How did it all start? So Jeff left his profitable position, very profitable who's doing quite well, add an investment bank, to create a startup company. In one thousand nine hundred and ninety four. After thorough research, he made a list of what possible products could be lucrative to sell once they went online. With a degree in computer science and electrical engineering and a handful of staff, he initially launched Amazon as an online book store from his garage. The company's name was inspired by the largest river in the world, akin to Bezos his aspirations to become the largest bookstore worldwide. This move was in fact a marketing strategy, since it would always be listed higher in numerous alphabetized lists, thus garnering more attention seo right from the get goo. Initially, Amazon was able to rake in around a six hundred and ten million dollars as...

...of nineteen ninety eight, just being an online book store. So he saw the opportunity with the Internet and he doubled down. Six hundred and ten million dollars is nothing to scoff at, considering that's already an incredibly successful business in and of itself. Eventually, the company expanded by allowing Third Party sellers on the platform to pave the way for consumers to access unique and rare items online, which is the current iteration of Amazon. Since then, Amazon has become the web giant that we know and love today. Amazon currently has merchant partnerships with multiple companies, logistical services and even numerous product lines and services. Because of its various products, the company's market value, as of two thousand and twenty one, has become one point, five five seven trillion dollars, on pace to hit the true two trillion dollar valuation market Cap Threshold, which is currently held by just apple Microsoft. But how did the business come to be?...

This company used strategies to set itself apart from its competitors. Let's dive into some of them right now. First, the get big fast mindset. So, intending to be the largest online book store, back in one thousand nine hundred and ninety four bezos implemented the get big fast strategy. This maximize the growing potential of the Internet by allowing third party sellers to start selling electronics, video games, software, toys, games and home items. There are three main concepts that were under this mindset that allowed Amazon to grow. So personalization equals profitability. Despite the growth Amazon acquired over its first few years, it was still a common online ecommerce platform. So to set it apart, Amazon fine tuned its online services to allow the platform to recommend new products based on the Algorithm of a consumers purchase history and data from similar buyers of each item. So it started using a very rudimentary ai to suggest things that you...

...could potentially purchase based on your spending habits. This was very novel at the time, and that personalization is something that amazons carry through ever since. The second thing was one click buying. Back then, Amazon had its leverage to make sure consumers felt they were directly purchasing from Amazon, despite the number of sellers that they were actually interacting with. So how does one click buying actually fit into this picture? So, unlike its competitors back in the day, Amazon allowed its customers to complete their payments or transactions without leaving the platform. At its core, this was customer friendly, customer success, user experienced strategy. This created a user friendly environment that foster convenience and ease at just the click of a button. It made everything feel seamless, even though it wasn't. Even though there's so many moving parts in the back end, the customer didn't experience any of it, and this is a lesson that we can carry forward to today. Make it easy for the customer to buy your product and...

...it seems simple. It could just be the interface that they use. It could be a one click check out. There's tools like stripe or fast that allow easy checkouts from any ECOMMERCE platform. But the point is doesn't matter if you have any commerce product, a DDC product, assass product, if you are a consultant in your selling, professional services make it easy for the customer to buy. And the third pillar was seller fulfillment. So, as a component of online shopping, sellers play a crucial role in facilitating service delivery. Amazon took pride in supporting their sellers in their early years by innovating ways to ensure that their products could reach and users. They allow sellers to stow their products in massive warehouses known as fulfilment centers. Amazon then took on the burden and the responsibility of logistics, customer service and product returns, removing that headache from a smaller seller that probably would have a hard time coordinating all those items. These alone are cost effective strategies that aim to support small businesses. So...

...small businesses in mind, the actual vendors in mind, but also the customers in mind. They focused on optimizing the experience for everybody but themselves, and in turn, that's how they were successful. So that was some of the growth strategies that Amazon deployed, but obviously these strategies were not enough to get it to the level that it is today. So they also doubled down on marketing strategies. And, aside from the physical aspects or the focus on logistics or the customer experience, the successive Amazon definitely was grounded in its marketing and sales tactics, as well as some of the items are just mentioned. So let's look at some of the market and sales strategies that were deployed by the company. So the first one is customer obsession. So, compared to their competitors, Amazon developed the reputation for being customer obsessed. The platform consistently provided a wide array of merchandise at low prices at the customers convenience. Their focus...

...to deliver the best experience paved the way for developing a system that constantly analyzes and tests market opportunities. It even fostered the creation of their loyalty programs, one of their key features to date. So Amazon prime, it's all focused on the customer. Having thrilled customers creates engaging atmospheres that makes them keep coming back for more. Now, outside of customer obsession. They also focused on more traditional marketing activities, so optimized and targeted emails. Amazon decided to include the personalization in their email campaign. So they optimized and targeted emails. They sent email campaigns that covered new releases and product recommendations catered to each customer. In addition, they only sent emails that were hyper relevant for the customer and they didn't focus on frequency. They actually decreased the frequency of the emails that when you did get an email, you found it useful as opposed to spam me or annoying. And lastly, they focused on partnership to further expand its...

...coverage. Amazon was smart and investing in its merchant partnerships from different sectors. As a result, it has become a great way of facilitating promotion and product distribution worldwide. They wanted to bring everyone up. They wanted to partner with as many people as possible. In turn, this led to development of performance based incentives that encouraged Amazon affiliates to sell more products, making more money on every product that they sell. So they always focus on compensating their partners above and beyond, because they knew that those partners, those affiliates were a great way to bring in traffic, to develop trust with markets and audience they didn't have developed trust with yet, and that's why these affiliate partnerships were so important for growing Amazon as a company. So what can we learn from Amazon success? So number one, the value of data and processing. Data processing has always been key and Driving Amazon success in the industry. With data adequately processed, the company can experiment through their test groups and evolve current features before being...

...released to the public. Second thing is don't be afraid to experiment and fail. Experiments are necessary to iron out the kinks of projects before launching, but keep in mind that despite numerous experiments, there may be opportunities that are bound to fail. One must be able to take these lessons and to adapt in an ever changing environment. Amazon did that exceptionally well. The four thing is to be customer centric. Customers always appreciate whenever platforms pursue their best interest, whenever companies pursue their best interests. This may be in the form of creating a user friendly interface, down to providing details that will keep the customers mind at ease about their products, or it could be personalizing or it could be obsessing over rectifying situations where the customer was wrong. Whatever it may be, customer centric, customer focus, customer obsessed, it always wins. and lastly, innovate, innovate and innovate some more. So can you imagine that Amazon...

...began as an online bookstore. One of the superpowers Amazon deployed was it was okay to disrupt its own business. It was never comfortable with where it was and it was never okay with average. It never underestimated the power of ideas and critical thinking and being able to uproot and disrupt your own business, as this was the boost and the advantage that any business could use. Be Okay Changing, be okay iterating, be okay disrupting yourself. Amazon is now one of the largest ECOMMERCE platforms. It took advantage of a growing industry. It has made trillions of dollars due to its data driven strategies, customer obsessed strategies, for the key benefit of its stakeholders, again the consumers. Be obsessed with customers, disrupt yourself and always be optimizing. Lesson straight from the Amazon playbook.

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