What started as an online bookstore using the founder’s garage in Bellevue, Washington as the starting warehouse boomed to be the largest internet-based retailer in the whole world. How did Amazon.com accomplish such an amazing feat? This company is arguably one of the best examples of the successes achieved because of organizational change. So today, we take a closer look at Amazon.com and how it became such a giant.
In 1994, Jeff Bezos decided to get in on the Internet business boom and build a business plan for what will be Amazon.com. The website itself went online in 1995. Bezos was not afraid that his business model would be copied by others–his logic was that corporate giants like McDonald’s had mimics yet stood at the top anyway. Bezos narrowed down the choices of what products his service would carry to compact discs, computer hardware, computer software, books, and videos. He chose books in the end as there was a large international market for literature and as the cost of acquisition would be lower than the other choices of his list,
This choice would prove to be the correct one as within two months of launch, Amazon was raking in around $20,000 a week. This was due to the fact that while physical stores and mail order catalogs could offer around 200,000 titles, an online store could offer more as its “warehouse” was digital. After five years, the internet company bubble had burst and several online companies folded. Amazon.com forged forward despite some setbacks like a lawsuit from Walmart. Walmart had claimed that Amazon had stolen trade secrets by hiring former Walmart executives. While the suit was settled out of court, Amazaon enacted changes in its internal restrictions. Amazon but in stricter measures and reassigned the former Walmart executives. The former Walmart employees named in the lawsuit were restricted in their duties which pertained to information systems.
Such a move made sure that no other such claims could be made again–which secured the company’s internal dealings and strengthened it as a whole. From there, Amazon made more changes. As soon as their online book market was steady, Amazon looked to adding more products to their service. In 2002, around eight years since it’s conception, Amazon.com now offered more than two dozen online “stores” which sold more than books. These websites carried cameras, cars, computers, tools, toys, and even travel packages.
Amazon partnered with Target and Circuit City and operated its own auction shop. Soon they also started selling clothing, movies, concert and event tickets. They continued to broke partnerships with existing brands in order to add more products to their site. The brands also gained mass exposure as Amazon.com was hosted in several countries and continents. It was safe to say that once you partner up with Amazon, you become an international brand.
On November of 2013, Amazon.com launched a partnership with the US Postal Service–enabling deliveries on Sundays. So instead of having one day where-in purchases weren’t delivered, Amazon made sure now that their customers would be able to shop and receive their orders 7 days a week. Just this year, Amazon announced convenience stores and plans to develop curbside pickup locations for food orders. A store in Seattle called “Amazon Go” was opened to Amazon employees. This store made use of sensors and automatically charges a shopper’s Amazon account as they walk out of the store. The primary objective being the elimination of checkout lines. They aim to open such stores for the general public early this year. Amazon Air’s beta-testing was also launched in 2016. This aimed to make use of drones to deliver orders directly to the homes of clients within minutes of purchase.
A great many lessons could be learned regarding the organizational changes that Amazon.com put into action. They started from a single product and diversified to meet a larger audience. Internal issues were dealt with swiftly. Amazon also continued to pioneer better partnerships and methods to better service their clients from daily deliveries, potential stores with no checkout lanes, and deliveries by drone.
While Amazon has had its share of roadblocks, Jeff Bezos learned from these and adjusted his business practices to keep their business model and services relevant.