Amazon.com

1. Who are Amazon’s competitors?

Amazon’s Competitors:

a. Barnes & Noble.com

b. Campusi.com

c. Half.com

d. Ebay.com

Amazon is ahead then its competitors:

Amazon.com different from its competition is that it not only sells books, but also sells CDs, videos, DVDs, toys and games, electronics, kitchenware, computers, and more. Barnes & Noble may be employing more than 32,000 booksellers in approximately 900 stores in 49 states, but Amazon.com has millions of people in more than 220 countries that purchase its products, which makes it the leading online shopping site. Although Half.com sells similar products as Amazon.com, it has only been around for five years, whereas Amazon.com has been around for nine years, which means that more people know about the site.

Amazon.com competitors are primarily in the Music, Video, and Book & Entertainment Retail industry. Amazon.com also competes in the Apparel & Accessories Retail, Auto Parts Retail, and Camera & Optical Goods Retail sectors.

2. Why would customers shop at Amazon if they can find better prices elsewhere?

Amazon made its initial mark selling books online. Company expanded itself from not selling online books with good price but with selling everything online like DVDs, videos, games, toys etc. Amazon also established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organization to manage the online presence of these large retailers. However, it also uses its distributions system to deliver the products.

With so many diverse products, and relationships, it might be tempting to keep everything separate. However, Amazon perceives advantages from showing the entire site to customers as a single, broad entity. Yes, customers click to the various stores to find individual items. But, run a search and you will quickly see that it identifies products from any division. --- Even better prices are found elsewhere customer would prefer to buy from Amazon because of the easiness a costumer founds on buying a product from Amazon website easy to search products off different size, price etc from any division. Hence, amazon.com can attract more customers through advance technologies which make shopping much easier.

Some Additional Benefits:

· Amazon.com worked upon the delivery time of product means effective lead time so that customer gets is product on time

· Effective faster and easy way to buy from amazon.com with its effective website – faster search of products from all departments, easy buying, easy way of payment systems, customer relationships etc

· Good discounts on products, good quality of products, product availability through out the year

· Customers can pick up their items directly from their local stores

· large selection

3. Why did Amazon create most of its own technology from scratch?

The entire system was built from scratch because Amazon wanted to make a customized system according the needs. The main focus was on price, selection and availability of products.

The company spent $200 million on new applications, including analysis software from E.piphany, logistics from Manugistics, and a new DBMS from Oracle. The system has a distinct feature which can be described in few steps

· When a customer places an order, the system immediately connects to the distribution centers, determines the best way to ship the product, and provides the details to the customer in two minutes.

· When someone purchases an item, Amazon system makes recommendations based on similar items purchased by other customers this is the unique facility they have.

· They wanted a system that enables suppliers to communicate in real time, even if they do not have sophisticated IT departments. They also need powerful tools that enable smaller stores to sell their products through Amazon’s system.

4. If Amazon buys products from other firms and simply ships them to customers, why does it need so many of its own distribution centers?

Amazon became a service organization to manage the online presence of many large retailers. It uses its distribution system to deliver the products.

There was always a vision to make the service as useful as possible to each user and to take advantage of the ability of the computer to help analyze a lot of data to show people things they were most likely to be interested in. Fueled by big dreams and seemingly endless cash from investors, Amazon.com created an almost magical offering for consumers: with help of supply chain management, login the website, take a quick, order something and get a quick shipment from the nearest warehouse.

But this magical dream is expensive and inefficient. There is no need to have 6 warehouses when one can do without any of them. The issue requires a serious thought on it. To cut down the costs, Amazon needs to cut down on warehouse expenses.

5. Will other retailers buy or lease the Web software and services from Amazon? Can Amazon make enough money from selling these services?

Yes, Amazon established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organization to manage the online presence of these large retailers.

2004 Financial statement shows, 25 percent of Amazon’s sales were just because of its retail partners. But, one of Amazon’s major relationships took a really bad turn in 2004 when Toys ‘R’ Us sued Amazon and Amazon countersued.

In 2003, the company did finally show a profit—of $35 million. In 2002 sales increased by selling products for other firms. And all this money finally spent on developing business technology and research and development.

There is no doubt Amazon has earned all the profit and finally turned into a star by only selling the services. They have started from scratch and step by step reached to the heights.