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Amazon (company)

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Amazon.com, Inc.
Type of businessPublic
Type of site
E-commerce
Available inEnglish, French, German, Spanish, Italian, Japanese, Chinese, Brazilian Portuguese, Dutch
Traded asNasdaq: AMZN
NASDAQ-100 Component
S&P 500 Component
FoundedJuly 6, 1994 (July 6, 1994)
Seattle, Washington, U.S.
HeadquartersSeattle[1][2][3]
Area servedWorldwide
Founder(s)Jeff Bezos
Key peopleJeff Bezos
(Chairman, President and CEO)
IndustryInternet
ProductsAppstore, The Book Depository, Game Studios, Instant Video, Instant Video UK, Instant Video German, Kindle, Lab126, Studios, Twitch.tv, Woot, MyHabit.com,[4] Shopbop,[5] Askville[6]
ServicesOnline shopping, Web hosting, Content Distribution
RevenueIncrease US$ 88.988 billion (2014)[7]
Operating incomeDecrease US$ 178 million (2014)[7]
Net incomeDecrease US$ -241 million (2014)[7]
Total assetsIncrease US$ 54.505 billion (2014)[7]
Total equityIncrease US$ 10.741 billion (2014)[7]
Employees154,100 (December 2014)[8]
Subsidiariesa2z, A9.com, Amazon Web Services, Alexa Internet, Audible.com, Digital Photography Review, Goodreads, Internet Movie Database, Junglee.com, Twitch, Zappos
URLamazon.com (original U.S. site)
various national sites
AdvertisingWeb banners, videos
LaunchedJuly 5, 1994[9]
Written inC++ and Java[10]

Amazon.com, Inc. (/ˈæməzɒn/ or /ˈæməzən/) is an American electronic commerce company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the United States.[12] Amazon.com started as an online bookstore, but soon diversified, selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry. The company also produces consumer electronics—notably, Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire Phone — and is a major provider of cloud computing services.

Amazon has separate retail websites for United States, United Kingdom & Ireland, France, Canada, Germany, The Netherlands, Italy, Spain, Australia, Brazil, Japan, China, India and Mexico. Amazon India will soon start offering music, movie and video streaming services in India. Cite error: The <ref> tag has too many names (see the help page). Amazon also offers international shipping to certain other countries for some of its products.[13] In 2011, it had professed an intention to launch its websites in Poland[14] and Sweden.[15]

History

Amazon founder Jeff Bezos

The company was founded in 1994, spurred by what Bezos called his "regret minimization framework", which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time.[16] In 1994, Bezos left his employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and moved to Seattle. He began to work on a business plan for what would eventually become Amazon.com.

Jeff Bezos incorporated the company as "Cadabra" on July 5, 1994[17] and the site went online as Amazon.com in 1995.[18] Bezos changed the name cadabra.com to amazon.com because it sounded too much like cadaver. Additionally, a name beginning with "A" was preferential due to the probability it would occur at the top of any list that was alphabetized.

Bezos selected the name Amazon by looking through the dictionary, and settled on "Amazon" because it was a place that was "exotic and different" just as he planned for his store to be; the Amazon river, he noted was by far the "biggest" river in the world (according to drainage, not length), and he planned to make his store the biggest in the world.[18] Bezos placed a premium on his head start in building a brand, telling a reporter, "There's nothing about our model that can't be copied over time. But you know, McDonald's got copied. And it still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world."[19]

After reading a report about the future of the Internet which projected annual Web commerce growth at 2,300%, Bezos created a list of 20 products which could be marketed online. He narrowed the list to what he felt were the five most promising products which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, due to the large world-wide demand for literature, the low price points for books, along with the huge number of titles available in print.[20] Amazon[21] was originally founded in Bezos' garage in Bellevue, Washington.[22]

The company began as an online bookstore, an idea spurred off with discussion with John Ingram of Ingram Book (now called Ingram Content Group), along with Keyur Patel who still holds a stake in Amazon.[23] In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to $20,000/week.[24] While the largest brick and mortar bookstores and mail order catalogs might offer 200,000 titles, an online bookstore could "carry" several times more, since they had an almost unlimited virtual (not actual) warehouse: those of the actual product makers/suppliers.

Since 2000, Amazon's logotype has featured a curved arrow leading from A to Z, representing that they carry every product from A to Z, with the arrow shaped like a smile.[25]

Amazon was incorporated in 1994, in the state of Washington. In July 1995, the company began service and sold its first book on Amazon.com: Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[26] In October 1995, the company announced itself to the public.[27] In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at a price of US$18.00 per share ($1.50 after three stock splits in the late 1990s).

Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years. This "slow" growth caused stockholders to complain about the company not reaching profitability fast enough to justify investing in, or to even survive in the long-term. When the dot-com bubble burst at the start of the 21st century, destroying many e-companies in the process, Amazon survived, and grew on past the bubble burst to become a huge player in online sales. It finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional business model could succeed.[28] In 1999, Time magazine named Bezos the Person of the Year, recognizing the company's success in popularizing online shopping.

Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false. Barnes and Noble asserted, "[It] isn't a bookstore at all. It's a book broker." The suit was later settled out of court, and Amazon continued to make the same claim."[29] Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen their trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the reassignment of the former Walmart executives.[29]

Acquisitions and investments

Source:[30]

Investment

Subsidiaries

  • 2004: A9.com, a company focused on researching and building innovative technology.[101]
  • 2004: Lab126, developers of integrated consumer electronics such as the Kindle.
  • 2007: Endless.com, an e-commerce brand focusing on shoes.[102]
  • 2007: Brilliance Audio, the largest independent audiobook producer in the US.[103]

Amazon owns over 40 subsidiaries, including Zappos, Diapers.com, Kiva Systems, Goodreads, Teachstreet, and IMDb.[104]

Corporate governance

Board of directors

As of November 2014, the board of directors is:[105]

Merchant partnerships

Until June 30, 2006, typing ToysRUs.com into a browser would bring up Amazon.com's "Toys & Games" tab; however, this relationship was terminated due to a lawsuit.[106] Amazon also hosted and managed the website for Borders bookstores but this ceased in 2008.[107] From 2001 until August 2011, Amazon hosted the retail website for Target.[108] Benefit Cosmetics, another merchant partner of Amazon, has also launched a major E-Commerce platform of their own based on Hybris and arvato systems NA, in the US, EU and China.[109]

Amazon.com operates retail websites for Sears Canada, bebe Stores, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity, edeals.com, and Mothercare, Amazon provides a unified multichannel platform where a customer can interact with some people they call the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.

On October 18, 2011, Amazon.com announced a partnership with DC Comics for the exclusive digital rights to many popular comics, including Superman, Batman, Green Lantern, The Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes & Noble to remove these titles from their shelves.[110]

In November 2013, Amazon.com announced a partnership with the United States Postal Service to begin delivering orders on Sundays. The service, included with Amazon’s standard shipping rates, initiated in metropolitan areas of Los Angeles and New York due to the high-volume and inability to deliver timely, with plans to expand into Dallas, Houston, New Orleans, and Phoenix by 2014.[111]

Locations

Headquarters

Amazon.com's former headquarters in the Pacific Medical Center building in Beacon Hill, Seattle

The company's global headquarters are in 14 buildings in Seattle's South Lake Union neighborhood. The European headquarters are in Luxembourg's capital, Luxembourg City. In Seattle, as of 2012, a three-tower headquarters near Amazon's existing buildings with a capacity of 12,000 employees is under construction.[112]

Software development centers

While much of Amazon's software development occurs in Seattle, the company employs software developers in centers across the globe. Some of these sites are run by an Amazon subsidiary called A2Z Development.[113]

Customer service centers

Fulfillment and warehousing

Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers:[120]

Warehouses are large and each has hundreds of employees. Employees are responsible for four basic tasks: unpacking and inspecting incoming goods; placing goods in storage and recording their location; picking goods from their computer recorded locations to make up an individual shipment; and shipping. A central computer which records the location of goods and maps out routes for pickers plays a central role; employees carry hand-held computers which communicate with the central computer and monitor their rate of progress. A picker with their cart may walk 10 or more miles a day. In the United Kingdom initial staffing was provided by Randstad Holding and other temporary employment agencies. Some workers are accepted as Amazon employees and granted pension and shares of stock; others are dismissed. "When we have permanent positions available, we look to the top performing temporary associates to fill them."[121] Development of a high level of automation is anticipated in the future following Amazon's 2012 acquisition of Kiva Systems, a warehouse automation company.

Customer Service Center in Huntington, West Virginia
Amazon.co.uk warehouse in Glenrothes, Scotland, UK (now closed)

Brick-and-mortar store

The Wall Street Journal announced Amazon would be launching its first physical retail store in January 2015. This store was to better service New York residents unable to take advantage of Amazon's delivery service.[136]

Other

Closed fulfillment, warehousing and customer service locations

These US distribution centers have been closed: SDC Seattle Distribution Center, located in Georgetown, just south of downtown Seattle; Red Rock, Nevada; Chambersburg, Pennsylvania; Munster, Indiana; and McDonough, Georgia.[137][138][139] From 2000[140] until February 2001, there was an Amazon customer service based in The Hague, Netherlands.[141][142]

Products and services

Third-generation Amazon Kindle

Retail goods

Amazon product lines include several media (books, DVDs, music CDs, software, videotapes, and software), apparel, baby products, consumer electronics, beauty products, gourmet food, groceries, health and personal-care items, industrial & scientific supplies, kitchen items, jewelry and watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items and toys & games.

The company launched amazon.com Auctions, a web auctions service, in March 1999. However, it failed to chip away at the large market share of the industry pioneer, eBay. Later, the company launched a fixed-price marketplace business, zShops, in September 1999, and the now defunct partnership with Sotheby's, called Sothebys.amazon.com, in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. As of October 2014, Amazon Marketplace is the largest of its kind, followed by similar marketplaces from Sears, Rakuten and Newegg.

In August 2007, Amazon announced AmazonFresh, a grocery service offering perishable and nonperishable foods. Customers can have orders delivered to their homes at dawn or during a specified daytime window. Delivery was initially restricted to residents of Mercer Island, Washington, and was later expanded to several ZIP codes in Seattle proper.[143] AmazonFresh also operated pick-up locations in the suburbs of Bellevue and Kirkland from summer 2007 through early 2008.

In 2012, Amazon announced the launch of Vine.com for buying green products, including groceries, household items, and apparel.[144] It is part of Quidsi, the company that Amazon bought in 2010 that also runs the sites Diapers.com (baby), Wag.com (pets), and YoYo.com (toys).[144] Amazon also owns other e-commerce sites like Shopbop.com, Woot.com, and Zappos.com.[144]

Amazon's Subscribe & Save program offers a discounted price on an item (usually sold in bulk), free shipping on every Subscribe & Save shipment, and automatic shipment of the item every one, two, three, or six months.[145]

In 2013, Amazon launched its site in India, amazon.in. It has started with electronic goods and plans to expand into fashion apparel, beauty, home essentials, and healthcare categories by the end of 2013.[citation needed] Amazon.in arranged a Diwali Dhamaka Week sale from 10 to 16 October 2014 exclusively to boost up its business in Indian market.[146] In July, Amazon had said it will invest $2 billion (Rs 12,000 crore) in India to expand business, after its largest Indian rival Flipkart announced $1 billion in funding.[147]

In 2014, Amazon sold 63% of all books bought online and 40% of all books sold overall.[148]

Consumer electronics

In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet", via Sprint's EV-DO wireless network. The screen uses E Ink technology to reduce battery consumption and to provide a more legible display. As of July 2014, there are over 2.7 million titles available for purchase at the Kindle Store.[149]

In September 2011, Amazon announced its entry into the tablet computer market by introducing the Kindle Fire, which runs a customized version of the operating system Android. The low pricing of Fire ($199 USD)[150] was widely perceived as a strategy backed by Amazon's revenue from its content sales, to be stimulated by sales of the Fire.

In September 2012, Amazon unveiled the second generation tablet, called the Kindle Fire HD. On September 25, 2013, Amazon.com unveiled its third generation tablet, called the Kindle Fire HDX.[151] In October 2013, the sixth generation Kindle was released.

In April 2014, Amazon announced its Amazon Fire TV set-top box system, a device targeted to compete with such systems like Apple TV or Google's Chromecast device. The Amazon set-top box allows for streaming videos from sites like Amazon's own streaming service as well as others such as Netflix or Hulu. The device also supports voice search for movies, as well as gaming, which includes special versions of Minecraft, Asphalt 8, and The Walking Dead.[152] It retails for $99 in the US.[153]

The company entered the smartphone market in July 2014 with the release of the Fire Phone.[154]

Amazon announced the Fire TV Stick in October 2014. The device allows users to stream content from a range of services. It will go on sale for $39 retail.[155]

Digital content

File:Amazon Kindle Fire HD 8.9" Tablet Japanese Edition.JPG
Amazon Kindle Fire HD 8.9" Tablet

Amazon's Honor System was launched in 2001 to allow customers to make donations or buy digital content, with Amazon collecting a percentage of the payment plus a fee; however, the service was discontinued in 2008[156] and replaced by Amazon Payments.

Amazon Music, its own online music store, launched as Amazon MP3 in the US on September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.[157] (In addition to copyright law, Amazon's terms of use agreements restrict use of the MP3s, but Amazon does not use digital rights management (DRM) to enforce those terms.)[158] In addition to independent music labels, Amazon MP3 primarily sells music from the "Big 4" record labels: EMI, Universal, Warner Bros. Records, and Sony Music. Prior to the launch of this service, Amazon made an investment in Amie Street, a music store with a variable pricing model based on demand.[159] Amazon MP3 was the first online offering of DRM-free music from all four major record companies.[160][161][162][163]

In January 2008, Amazon began distributing its MP3 service to subsidiary websites worldwide[164] and, in December 2008, Amazon MP3 was made available in the UK. At the launch of Amazon MP3 in the UK, over 3 million Digital Rights Management (DRM)-free songs were made available to consumers, with prices that started at 59p, compared to Apple's 79p starting price.[165]

In July 2010, Amazon announced that e-book sales for its Kindle reader outnumbered sales of hardcover books for the first time ever during the second quarter of 2010. Amazon claims that, during that period, 143 e-books were sold for every 100 hardcover books, including hardcovers for which there is no digital edition; and during late June and early July, sales rose to 180 digital books for every 100 hardcovers.[166]

On March 22, 2011, Amazon launched the Amazon Appstore for Android devices and the service was made available in over 200 countries.[167] Also in 2011, Amazon announced that it was releasing a Mac download store to offer dozens of games and hundreds of pieces of software for Apple computers.[168]

In January 2013, Amazon launched AutoRip, a digital music service. The service allows customers to receive a free MP3 copy of select CDs purchased through Amazon.[169] Amazon announced in September 2013 that they would launch Kindle MatchBook in October 2013, a similar service for books allowing customers who buy books from Amazon to acquire an e-book copy for free, or at a discounted price of US$3 or less.[170] MatchBook was launched on the company's site on October 29, 2013.[171][172]

Amazon Games

In October 2008, Amazon acquired game developer and distributor Reflexive Entertainment.[173] This studio continued to develop games for PC, Mac and Kindle eReaders under the brands Reflexive and Amazon Digital Services. Notable titles include Every Word for Kindle Paperwhite and Airport Mania for Kindle Fire, Android, iOS Windows and Mac.

In August 2012, Amazon announced it would be adding a gaming department to its company titled Amazon Game Studios. Amazon stated that they will introduce "innovative, fun and well-crafted games" to consumers.[174] According to the Amazon Game Studios website, the last game that was launched by the department was Amazon's first ever mobile game Air Patriots, released on November 1, 2012.[175]

On February 6, 2014, Amazon confirmed the acquisition of the gaming company Double Helix Games without any indication of the financial terms. The 75 Double Helix employees will become Amazon employees and their Orange County, California headquarters remain their operating base. Amazon informed the TechCrunch media company that it "acquired Double Helix as part of our [Amazon's] ongoing commitment to build innovative games for customers" and confirmed that Double Helix's current game roster and other future developments will receive support following the acquisition.[176]

On August 25, 2014, Amazon announced its intent to acquire the video game streaming website Twitch for $970 million.[177][178][179] The acquisition of Twitch is expected to help Amazon drive Internet traffic and potentially boost its Prime membership program, and promote its video ad and Fire TV set top box business.[180]

Amazon Art

In August 2013 Amazon launched Amazon Art as an online marketplace selling original and limited edition fine art from selected galleries.[181] The initial 40000 items listed for sale included Norman Rockwell's painting Willie Gillis: Package from Home priced at $4.85 million, L'Enfant a la tasse by Claude Monet for $1.45 million and Andy Warhol's Sachiko for $45 000.[182]

Amazon Instant Video

Main articles: Amazon Instant Video, Amazon Instant Video UK, and Amazon Instant Video German

In 2015, the Prime Instant Video exclusive series Transparent earned two Golden Globe Awards, and Transparent is the first series from a streaming service to win a Golden Globe for best series.[7]

Amazon Prime

File:Amazon Prime logo.jpg

In 2005, Amazon announced the creation of Amazon Prime, a membership offering free two-day shipping within the contiguous United States on all eligible purchases for a flat annual fee of $79 (equivalent to $123 in 2023),[183] as well as discounted one-day shipping rates.[184] Amazon launched the program in Germany, Japan, and the United Kingdom in 2007; in France (as "Amazon Premium") in 2008, in Italy in 2011, and in Canada in 2013.[185]

Amazon Prime membership in Germany, the United Kingdom, and the United States[186] also provides Amazon Instant Video, the instant streaming of selected movies and TV shows at no additional cost.[187] In November 2011, it was announced that Prime members have access to the Kindle Owners’ Lending Library, which allows users to borrow certain popular Kindle ebooks for free reading on Kindle hardware, up to one book a month, with no due date.[188]

In March 2014, Amazon announced an increase in the annual membership fee for Amazon Prime, from $79 to $99.[183][189] Shortly after this change, Amazon announced Prime Music, a service whose members can get unlimited, ad-free streaming of over a million songs and access to curated playlists.[190] In November 2014, Amazon added Prime Photos, which allows unlimited photo storage in the users' Amazon cloud drive.[191]

Private labels and exclusive marketing arrangements

In August 2005,[192] Amazon began selling products under its own private label, "Pinzon"; the trademark applications indicated that the label would be used for textiles, kitchen utensils, and other household goods.[192] In March 2007, the company applied to expand the trademark to cover a more diverse list of goods and to register a new design consisting of the "word PINZON in stylized letters with a notched letter "O" which appears at the "one o'clock" position".[193] Coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.[193] In September 2008, Amazon filed to have the name registered. USPTO has finished its review of the application, but Amazon has yet to receive an official registration for the name.

AmazonBasics is a private-label consumer electronics product line. It sells AV cables, blank DVD media and other electronics products under the AmazonBasics product label.[194] The line was launched in 2009.[195]

An Amazon.com exclusive is a product, usually a DVD, that is available exclusively on Amazon.com. Some DVDs are produced by the owner of the film/product, while others are produced by Amazon.com itself. The DVDs produced by Amazon are made using their "CreateSpace" program, in which DVDs are created, upon ordering, using DVD-R technology. The DVDs are then shipped about two days later. Some DVDs (such as the Jersey Shore Season 1 or The Unusuals Season 1) first release their DVD on Amazon as an Amazon.com Exclusive for a limited time before being released elsewhere. On May 23, 2011, Amazon.com allowed customers to download Lady Gaga's Born This Way album for 99 cents, resulting in some downloads being delayed, due to an extremely high volume of downloads.[196]

Amazon self publishing services through one of its companies, CreateSpace, a member of the Amazon group of companies.[197]

Computing services

AWS Summit 2013 event in NYC.

Amazon launched Amazon Web Services (AWS) in 2002, which provides programmatic access to latent features on its website.

In November 2005, Amazon began testing Amazon Mechanical Turk, an application programming interface (API) allowing programs to dispatch tasks to human processors.

In March 2006, Amazon launched an online storage service called Amazon Simple Storage Service (Amazon S3). An unlimited number of data objects, from 1 byte to 5 terabytes in size, can be stored in S3 and distributed via HTTP or BitTorrent. The service charges monthly fees for data stored and transferred. In 2006, Amazon introduced Amazon Simple Queue Service (Amazon SQS), a distributed queue messaging service, and product wikis (later folded into Amapedia) and discussion forums for certain products using guidelines that follow standard message board conventions.

Also in 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon EC2), a virtual site farm,[198] allowing users to use the Amazon infrastructure to run applications ranging from running simulations to web hosting. In 2008, Amazon improved the service by adding Elastic Block Store (EBS), offering persistent storage for Amazon EC2 instances and Elastic IP addresses, and offering static IP addresses designed for dynamic cloud computing. Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a high-reliability, high-performance database system. In 2008, Amazon graduated EC2 from beta to "Generally Available" and added support for the Microsoft Windows platform.[199]

Amazon continues to refine and add services to AWS, adding such services as Scalable DNS service (Amazon Route 53), payment handling, and AWS specific APIs for their Mechanical Turk service.

In August 2012, Amazon announced Amazon Glacier, a low-cost online file storage web service that provides reliable data archiving, storage, and backup.[200]

In November 2012 at AWS' web developer conference in Las Vegas it announced it was targeting large companies as cloud storage clients. It will further cut its S3 prices to customers with long-term contracts in its "Redshift" storage service launching in 2013.

In March 2013 Amazon announced its Mobile Ads API for developers. The new Ads API can be used on apps distributed on any Android platform as long as the app is also available on Amazon’s Appstore.[201]

As of December 2014, Amazon Web Services operated 1.4 Million servers across 11 regions and 28 availability zones.[202]

Content production

Amazon Publishing is Amazon's publishing unit.[203] It is composed of AmazonEncore,[204] AmazonCrossing,[205] Montlake Romance,[206] Thomas & Mercer,[207] 47 North,[208] and Powered by Amazon. Additional imprints are planned.

Launched in 2005, Amazon Shorts offered exclusive short stories and non-fiction pieces from best-selling authors for immediate download. By June 2007, the program had over 1,700 pieces and was adding about 50 new pieces per week. The program was discontinued on June 1, 2010.[209][210]

In 2008, Amazon expanded into film production, producing the film The Stolen Child with 20th Century Fox.[211]

Donations

Amazon also created "channels" to benefit certain causes. In 2004, Amazon allowed customers to donate $5 to $200 to the campaigns of 2004 US presidential hopefuls, providing links that raised $300,000 for the candidates.[212] Amazon has periodically reactivated a Red Cross donation channel after crises such as Hurricane Sandy, Hurricane Katrina, and the 2004 earthquake and tsunami in the Indian Ocean. By January 2005, nearly 200,000 people had donated over $15.7 million in the US.[213]

Amazon Local

Amazon Local is a daily deal service launched in June 2011 in Boise, Idaho.[214] As of 2013, Amazon Local offers daily deals to over 100 regions in 36 U.S. states. Amazon Local also acts as a deal aggregator; some of the deals are actually offered through LivingSocial, a firm in which Amazon has heavily invested.[215]

It was launched gradually in the United Kingdom on 29 August 2012, starting in London and expanding to more towns and cities.[216]

AmazonWireless

In July 2009, Amazon.com launched their AmazonWireless website,[217] which offers cellular devices and service plans for Verizon Wireless, AT&T, Sprint and T-Mobile in the US.[218]

AmazonFresh and Amazon Prime Pantry

AmazonFresh is a home grocery delivery service first trialled in 2007, and later made available in the Seattle and Los Angeles areas. Amazon Prime Pantry is a similar service covering the 48 contiguous United States, allowing the order of 45 pounds of dry goods and non-perishable groceries for a flat delivery fee.

Amazon Prime Air

Main article: Amazon Prime Air

60 Minutes announced on December 1, 2013 that Amazon Prime Air was a possible future delivery service expected to be in development for several more years. In concept, the process would use drones to deliver small packages (less than five pounds) within 30 minutes by flying short distances (10–20 km) from local Amazon Fulfillment Centers.[219][220] The project will require the FAA (Federal Aviation Administration) to approve commercial use of unmanned drones.[221]

Such approval could be in place as early as 2015, and Amazon expects to be ready at that time.[222][223] In July 2014 it was revealed the company was developing its 8th and 9th drone prototypes, some that could fly 50 miles an hour and carry 5-pound packages, and had applied to the FAA to test them.[224]

Prime Now

As a benefit to Prime members, members in parts of Manhattan can get products delivered to them within one hour for a fee of $7.99, or within two hours for no fee. 25,000 daily essential products are available with this delivery service.[225]

Amazon Supply

Amazon Supply, launched in 2012, offers industrial and scientific components and Maintenance, Repair and Operations (MRO) supplies.[65] Amazon Supply was developed based on experience operating Smallparts.com, acquired in 2005. (The Smallparts.com brand was discontinued with the launch of Amazon Supply.) While Amazon Supply uses the same order fulfillment and distribution system as Amazon.com, its online retailer services customers in over 220 countries worldwide. [226]

Other services

In 2007, Amazon launched Amapedia, a now-defunct wiki for user-generated content to replace ProductWiki, and the video on demand service Amazon Unbox.

Also in 2007, Amazon launched Amazon Vine, which allows reviewers free access to prerelease products from vendors in return for posting a review, as well as a payment service specifically targeted at developers, Amazon FPS.[citation needed]

IMDb and Amazon launched a website called SoundUnwound for browsing music metadata with wiki-like user contribution in September 2007; this data was also used for Amazon's Artist Pages.[227] Soundunwound ceased existence on June 18, 2012, and the site redirected to Amazon.

Amazon Connect enables authors to post remarks on their book pages to customers.

Amazon Smile, done by using smile.amazon.com when normally shopping, allows Amazon to donate 0.5% of the sale price to a selected charity.[228]

Amazon Webstore allows businesses to create custom e-commerce websites using Amazon technology. Sellers pay a commission of 1-2%, plus credit-card processing fees and fraud protection, and a subscription fee which ranges from $0 to $39.99 per month depending on the bundle option for an unlimited number of listings.[229] Amazon has chosen very few companies to become their implementation solution provider, and they are Qlick Cart, 4C Media, Absolute Webstores, atmosol, eCatalog, Explore Consulting, GoWebBaby, Kaushalam, KLoc Technologies, Luxor Design, SynapseIndia, and V Group. These companies encourage traders to have their own webstore with easy guidance and solutions.[230]

In August 2014, Amazon launched a credit card reader. Merchants can use it to conduct payments through a smartphone or tablet.[231]

In 2014, Amazon launched a feature called "make an offer" that allows customers to place a bid to 3rd party sellers, rather than buy outright. However, unlike eBay, the feature is not an auction but rather a one-to-one bid where the customer haggles privately with the seller.[232]

In January 2015, Amazon announced its own email and scheduling service dubbed WorkMail developed by Amazon Web Services, the cloud computing unit of Amazon Inc. The Amazon email service is expected to bring in $10 billion extra revenue to the company.[233]

Companies

Companies owned by Amazon that operate under their own brand.

Audible.com

Audible.com is a seller and producer of spoken audio entertainment, information, and educational programming on the Internet. Audible sells digital audiobooks, radio, and TV programs, and audio versions of magazines and newspapers. Through its production arm, Audible Studios, Audible has also become the world's largest producer of downloadable audiobooks. On January 31, 2008 Amazon announced it would buy Audible for about $300 million. The deal closed in March 2008, and Audible became a subsidiary of Amazon.[234]

Brilliance Audio

Brilliance Audio is an audiobook publisher founded in 1984 by Michael Snodgrass in Grand Haven, Michigan.[235] The company produced its first 8 audio titles in 1985.[235] The company was purchased by Amazon in 2007 for an undisclosed amount.[67][236] At the time of the acquisition Brilliance was producing 12-15 new titles a month.[236] It operates as an independent company within Amazon.

In 1984, Brilliance Audio invented a technique for recording twice as much on the same cassette.[237] The technique involved recording on each of the two channels of each stereo track.[237] It has been credited with revolutionizing the burgeoning audiobook market in the mid-1980s since it made unabridged books affordable.[237]

ComiXology

ComiXology is a cloud-based digital comics platform with over 200 million comic downloads as of September 2013. It offers a selection of more than 40,000 comic books and graphic novels across Android, iOS, Kindle Fire, and Windows 8 devices, and over the Internet. Amazon bought the company in April 2014.[238]

Goodreads

Goodreads is a "social cataloging" website founded in December 2006 and launched in January 2007 by Otis Chandler, a software engineer and entrepreneur, and Elizabeth Chandler. The website allows individuals to freely search Goodreads' extensive user-populated database of books, annotations, and reviews. Users can sign up and register books to generate library catalogs and reading lists. They can also create their own groups of book suggestions and discussions. In December 2007, the site had over 650,000 members and over 10,000,000 books had been added. Amazon bought the company in March 2013.[239]

Shelfari

Shelfari is a social cataloging website for books. Shelfari users build virtual bookshelves of the titles they own or have read, and can rate, review, tag, and discuss their books. Users can also create groups that other members may join, create discussions, and talk about books, or other topics. Recommendations can be sent to friends on the site for what books to read. Amazon bought the company in August 2008.[239]

Website

The domain amazon.com attracted at least 615 million visitors annually by 2008, twice the number of Walmart.[240] Amazon attracts approximately 65 million customers to its US website per month.[241] The company has also invested heavily on a massive amount of server capacity for its website, especially to handle the excessive traffic during the December Christmas holiday season.[242]

Results generated by Amazon's search engine are partly determined by promotional fees.[243]

Amazon's localized storefronts, which differ in selection and prices, are differentiated by top-level domain and country code:

Region Sovereignty Domain name
Asia
 China amazon.cn
z.cn
 India amazon.in
 Japan amazon.co.jp
Europe
 France amazon.fr
 Germany amazon.de
 Italy amazon.it
 Netherlands amazon.nl
 Spain amazon.es
 United Kingdom amazon.co.uk
North America
 Canada amazon.ca
 Mexico amazon.com.mx
 United States amazon.com
Oceania  Australia amazon.com.au
South America  Brazil amazon.com.br

Reviews

See also: Amazon.com controversies § Amazon reviews

Amazon allows users to submit reviews to the web page of each product. Reviewers must rate the product on a rating scale from one to five stars. Amazon provides a badging option for reviewers which indicate the real name of the reviewer (based on confirmation of a credit card account) or which indicate that the reviewer is one of the top reviewers by popularity. Customers may comment or vote on the reviews, indicating whether or not they found it helpful to them. If a review is given enough "helpful" hits, it appears on the front page of the product. In 2010, Amazon was reported as being the largest single source of Internet consumer reviews.[244]

When publishers asked Bezos why Amazon would publish negative reviews, he defended the practice by claiming that amazon.com was "taking a different approach ... we want to make every book available—the good, the bad, and the ugly ... to let truth loose".[245]

Although reviews are attributed to the credit-card name of the reviewer, there have been cases of positive reviews being written and posted by a public relations company on behalf of its clients,[246] and writers employing pseudonyms to leave negative reviews of their rivals' work.[247]

Following the listing of Untouchable: The Strange Life and Tragic Death of Michael Jackson, a disparaging biography of Michael Jackson by Randall Sullivan, his fans, organized via social media as "Michael Jackson's Rapid Response Team to Media Attacks" bombarded Amazon with negative reviews and negative ratings of positive reviews.[248]

Content search

"Search Inside the Book" is a feature which allows customers to search for keywords in the full text of many books in the catalog.[249][250] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003.[251] There are currently about 300,000 books in the program. Amazon has cooperated with around 130 publishers to allow users to perform these searches.

To avoid copyright violations, amazon.com does not return the computer-readable text of the book. Instead, it returns a picture of the matching page, instructs the web browser to disable printing, and puts limits on the number of pages in a book a single user can access. Additionally, customers can purchase online access to some of the same books via the "Amazon Upgrade" program.

Third-party sellers

Amazon derives many of its sales from third-party sellers who sell products on Amazon (around 40% in 2008).[252] Associates receive a commission for referring customers to Amazon by placing links on their websites to Amazon, if the referral results in a sale. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[253] According to W3Techs the Amazon Affiliate Program is used by 1.2% of all websites, and it is the second most popular advertising network after Google Ads.[254] It is frequently used by websites and non-profits to provide a way for supporters to earn them commission.[255] Amazon reported over 1.3 million sellers sold products through Amazon's websites in 2007. Unlike eBay, Amazon sellers do not have to maintain separate payment accounts; all payments are handled by Amazon.

Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service. A new affiliate product, aStore, allows Associates to embed a subset of Amazon products within another website, or linked to another website. In June 2010, Amazon Seller Product Suggestions was launched (rumored to be internally called "Project Genesis") to provide more transparency to sellers by recommending specific products to third-party sellers to sell on Amazon. Products suggested are based on customers' browsing history.[256]

Amazon sales rank

The Amazon sales rank (ASR) provides an indication of the popularity of a product sold on any Amazon locale. It is a relative indicator of popularity that is updated hourly. Effectively, it is a "best sellers list" for the millions of products stocked by Amazon.[257] While the ASR has no direct effect on the sales of a product, it is used by Amazon to determine which products to include in their best sellers lists.[257] Products that appear in these lists enjoy additional exposure on the Amazon website, and this may lead to an increase in sales. In particular, products that experience large jumps (up or down) in their sales ranks may be included within Amazon's lists of "movers and shakers," and this also provides additional exposure that may lead to an increase in sales.[258] For competitive reasons, Amazon does not release actual sales figures to the public. However, Amazon has now begun to release point of sale data via the Nielsen BookScan service to verified authors.[259] While the ASR has been the source of much speculation by publishers, manufacturers and marketers, Amazon itself does not release the details of its sales rank calculation algorithm. In addition, it states:

Please keep in mind that our sales rank figures are simply meant to be a guide of general interest for the customer and not definitive sales information for publishers—we assume you have this information regularly from your distribution sources

— Amazon.com Help, [260]

Amazon technology

Customer Relationship Management (CRM) and Information Management (IM) support Amazon’s business strategy. The core technology that keeps Amazon running is Linux-based. As of 2005, Amazon had the world’s three largest Linux databases, with capacities of 7.8 TB, 18.5 TB, and 24.7 TB. The central data warehouse of Amazon is made of 28 Hewlett Packard servers with four CPUs per node running Oracle database software. Amazon’s technology architecture handles millions of back-end operations every day, as well as queries from more than half a million third-party sellers. With hundreds of thousands of people sending their credit card numbers to Amazon’s servers everyday, security becomes a major concern. Amazon employs Netscape Secure Commerce Server using the Secure Socket Layer protocol which stores all credit card details in a separate database. The company also records data on customer buyer behavior which enables them to offer or recommend to an individual specific item, or bundles of items based upon preferences demonstrated through purchases or items visited.[261]

On January 31, 2013 Amazon experienced an outage that lasted approximately 49 minutes, leaving its site inaccessible to some customers.[262]

On May 5, 2014 Amazon unveiled a partnership with Twitter. Twitter users can link their accounts to an Amazon account, and automatically add items to the shopping cart by responding to any tweet with an Amazon product link bearing the hashtag #AmazonCart. Customers never leave the Twitter feed, and the product is waiting for them when they head over to Amazon.[263]

Multi-level sales strategy

Amazon employs a multi-level e-commerce strategy. Amazon started off by focusing on Business-to-Consumer relationships between itself and its customers, and Business-to-Business relationships between itself and its suppliers but it then moved to incorporate Customer-to-Business transactions as it realized the value of customer reviews as part of the product descriptions. It now also facilitates customer to customer with the provision of the Amazon marketplace which act as an intermediary to facilitate consumer to consumer transactions. The company lets almost anyone sell almost anything using its platform. In addition to affiliate program that lets anybody post Amazon links and earn a commission on click through sales, there is now a program which let those affiliates build entire websites based on Amazon’s platform.[264]

Some other large e-commerce sellers use Amazon to sell their products in addition to selling them through their own websites. The sales are processed through Amazon.com and end up at individual sellers for processing and order fulfillment and Amazon leases space for these retailers. Small sellers of used and new goods go to Amazon Marketplace to offer goods at a fixed price.[265] Amazon also employs the use of drop shippers or meta sellers. These are members or entities that advertise goods on Amazon who order these goods direct from other competing websites but usually from other Amazon members. These meta sellers may have millions of products listed, have large transaction numbers and are grouped alongside other less prolific members giving them credibility as just someone who has been in business for a long time. Markup is anywhere from 50% to 100% and sometimes more, these sellers maintain that items are in stock when the opposite is true. As Amazon increases their dominance in the marketplace these drop shippers have become more and more commonplace in recent years.[citation needed]

Revenue

Over the 2000-2010 decade, Amazon has developed a customer base of around 30 million people. Amazon.com is primarily a retail site with a sales revenue model. Amazon makes its money by taking a small percentage of the sale price of each item that is sold through its website. Amazon also allows companies to advertise their products by paying to be listed as featured products.[266]

Controversies

Main article: Amazon.com controversies

Since its founding, the company has attracted criticism and controversy from multiple sources over its actions. These include: luring customers away from the site's brick and mortar competitors,[267] poor warehouse conditions for workers; anti-unionization efforts; Amazon Kindle remote content removal; taking public subsidies; its "1-Click patent" claims; anti-competitive actions; price discrimination; various decisions over whether to censor or publish content such as the WikiLeaks website; LGBT book sales rank;[268][269] and works containing libel, facilitating dogfight, cockfight, or pedophile activities. In December 2011, Amazon faced backlash from small businesses for running a one-day deal to promote its new Price Check app. Shoppers who used the app to check prices in a brick-and-mortar store were offered a 5% discount to purchase the same item from Amazon.[270] Companies like Groupon, eBay, and Taap.it countered Amazon's promotion by offering $10 off from their products.[271][272] The company has also faced accusations of putting undue pressure on suppliers to maintain and extend its profitability. One effort to squeeze the most vulnerable book publishers was known within the company as the Gazelle Project, after Bezos suggested, according to Brad Stone, "that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle."[243] In July 2014 the Federal Trade Commission launched a lawsuit against the company alleging it was promoting in-app purchases to children, which were being transacted without parental consent.

Sales and use taxes

Main article: Amazon tax

Poor working conditions

Amazon has attracted widespread criticism by both current and former employees,[273][274] as well as the media and politicians for poor working conditions. In 2011 it was publicized that at the Breinigsville, Pennsylvania warehouse, workers had to carry out work in 100 °F (38 °C) heat, resulting in employees becoming extremely uncomfortable and suffering from dehydration and collapse. Loading-bay doors were not opened to allow in fresh air as "managers were worried about theft". Amazon's initial response was to pay for an ambulance to sit outside on call to cart away overheated employees.

Some workers, "pickers", who travel the building with a trolley and a handheld scanner "picking" customer orders can walk up to 15 miles a day back and forward, and if they fall behind on their targets, they can be reprimanded. The handheld scanners feed back to the employee real time information on how fast or slowly they are going, and also serve to allow Team Leads and Area Managers to track the specific locations of employees and how much "idle time" they gain when not working.[275][276] In a German television report broadcast in February 2013, journalists Diana Löbl and Peter Onneken conducted a covert investigation at the distribution center of Amazon in the town of Bad Hersfeld in the German state of Hesse. The report highlights the behavior of some of the security guards, themselves being employed by a third party company, who apparently either had a Neo-nazi background or deliberately dressed in Neo-Nazi apparel, and who were intimidating foreign and temporary female workers at its distribution centres. The third party security company involved was delisted by Amazon as a business contact shortly after that report.[277][278][279][280][281]

Lobbying

Amazon.com lobbies the United States federal government and state governments on issues such as the enforcement of sales taxes on online sales, transportation safety, privacy and data protection, and intellectual property. According to regulatory filings, Amazon.com focuses its lobbying on the US Congress, the Federal Communications Commission, and the Federal Reserve. Amazon.com spent $500,000 on lobbying in the second quarter of 2010, $630,000 in the first quarter of 2011, and $450,000 in the second quarter of that year.[282]

Amazon.com was a corporate member of the American Legislative Exchange Council (ALEC) until it dropped membership following protests at its shareholders' meeting May 24, 2012.[283]

The initiative Choice in eCommerce was founded on May 8, 2013 by several online retailers in Berlin, Germany.[284][285][286][287][288][289][290][291][292] The cause was, in the view of the initiative, sales bans and online restrictions by individual manufacturers. The dealers felt cut off from their main sales channel and thus deprived them the opportunity to use online platforms like Amazon, eBay or Rakuten in a competitive market for the benefit of their customers.

In 2014, Amazon expanded its lobbying practices as it prepared to lobby the Federal Aviation Administration to approve its drone delivery program, hiring the powerful Akin Gump Strauss Hauer & Feld lobbying firm in June.[293]

Notable businesses founded by former employees

A number of companies have been started and founded by former Amazon employees.[294]

See also

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Further reading

Wikimedia Commons has media related to Amazon.com.
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