Back in 1994, company founders had no idea just how much of an impact their passion would become the world’s biggest online retailer, with an annual revenue of $61.09 billion the company grew from humble beginnings.
So, travel back to 1994 and Jeffrey P.Bezos was making his money working on wall street. At a just 30, Bezos saw the potential of the internet as it was growing at an alarming rate and he decided that he was going to sell books on the internet as their demand and availability was favourable for starting an online business.
Working from his garage and using his parents savings to fund the start of the business the company was making $20,000 in sales a week but this was re invested. Initial funding followed in the sum of $8 million in 1995. In an aim of making capital Amazon went public at $18 a share in 1997.
Amazon went from selling books to adding CD’s in 1998. They also stated their intention to sell much more than just books and after purchasing Junglee corporation (a service that allows people to shop for a variety of items from clothes to toys) in 1998 this made their intentions even clearer.
In 2011, Amazon had over 30,000 full time employees in the USA, the end of 2016 they had over 180,000 employees. Such growth has been incredible for the American economy as such a large company that continues to grow offers jobs to so many.
Amazon has a reputation for being a company with a more than strong background with a lot of finances behind them. Amazon is now considered the e-commerce king and dominates the industry. There are however those that question the ethics of a company selling everything online has put small and local businesses at risk over the years by offering the same products but cheaper and more widely available.
Amazon also came under scrutiny in its hometown of Seattle, where they were accused of not doing enough for local charities. The company’s presence in the City had driven up house prices as well paid staff from the computing industries flocked to the town as opportunities were abundant.
The treatment of staff has also been covered in mainstream media. With many outlets writing about the challenging conditions for white collar workers and in a report released regarding the workplace conditions of the company, only 63% of employees said they would recommend the company to a friend.Compare these figures to Google who are widely recognised as a well praised employer and you will find that the same report stated that 91% of employees said they would recommend the company to a friend.
Amazon has also come under some scrutiny in recent years in regards to tax avoidance in the UK. In 2012 it came to light that Amazon had generated over £3.3bn in sales in the UK but paid zero corporation tax on any profit, leading to an investigation from the UK tax office. The government investigated this along with other giants Starbucks, and Google for the avoidance of tax. Many people have boycotted the company out of protest, but going by their figures of growth in the years since this hasn’t slowed Amazon down.
In response to criticism over their dealings that affect the sustainability the company offers, Amazon appointed Christine Bader as social responsibility director in 2015. Having worked in a similar role for BP for almost 10 years she had great experience in dealing with the backlash of negativity towards a company.
There are many subsidiary companies of Amazon and these include:
Audiable.com a seller of digital audiobooks, this has links to Amazon’s early days and shows how far they have come from selling books in the mid 1990’s to audio books. Amazon purchased audible for $300 million in 2008.
This site which was purchased by Amazon in 2013 gives users the chance to scroll through Goodreads huge database full of books and reviews. It gives users the chance to register books once signed up. In 2007 the site had 650,000 members.
Launched in 2007 this service is a paid membership access area of Amazon where a customer can stream movies and TV programmes as well as access to borrowing books on Kindle. It also offers customers free two day shipping as part of the service. Amazon offer a 30-day free trial for potential customers to try the service.
What does the future hold for amazon?
Considered prime stock for investors, according to experts – Amazon is predicted to reach $1,000 a share by 2018. This is down to the fact that Amazon is still growing at a steady rate, increasing revenues by 30%. There are those who believe that Amazon is overvalued and growth will start to slow in the future. With the company constntly investing in new companies and growing their portfolio it would appear that their growth shows no signs of ending or slowing anytime soon.
Amazon Go is the walk in/out grocery store, still very much in beta and shows Amazon’s intention to conquer all produce selling markets having dominated online for so long. If the majority of dollars spent are still in store then Amazon has recognised this and are trying to capitalize. Having similarities to your click and collect online food shop experience, Amazon Go eliminates lines in the same way as the intention is you order online then pick up your products in store.
Prime Now, the urban delivery service which aims to make products available to customers within 1 to 4 hours is another sign that the future will be full of innovations coming out of Amazon. Encouraging people to ‘skip the trip’ this service offers customer to overcome the small inconvenience that is waiting a bit longer for your product. Although the promise of no added shipping cost is alluring this step into the super convenient just shows the direction Amazon are constantly headed in.
Any company that has been in business for 23 years is going to have its ups and downs, it’s good point and weaknesses and although Amazon is no exception it is clear that the e-commerce giant shows no signs of slowing down. When it has some many resources and market value behind it, it is easy to see why.