ECommerce success story: The history of Amazon (1)

  • One of the most interesting things about online business is that there’s always a trail to follow. Even the biggest ones had to grow step by step, and we can learn from what that growth means. Today we’re going to focus on the success story of Amazon: the biggest of them all, and an example for almost all eCommerce businesses.

    I want you to look back and dissect how Jeff Bezos went from managing an online bookstore to an international monster that threats to devour all sectors and niches in its way. 

  • How was Amazon born?

  • Basically, the history doesn’t defer much from any other startup we can think of.

    In 1994, the Internet was already a reality. In fact, it is considered one of the years with the fastest growth in the internet community. In 1994, the first online universal bank service appeared thanks to the Stanford Federal Credit Union, and it was even possible to order a pizza online with Telepizza.

    Jeff Bezos worked on Wall Street. He was a 30-year-old executive who had graduated from the prestigious university Princeton. During the first part of his career,  he worked in diverse business areas related in one way or another to the technology.

    At some point, Bezos knew that the Internet was going to change the consumption habits of almost all people, that it was something that was already happening in front of his eyes and that he wanted to be part of that paradigmatic change.

    So, he decided to bet on the online sector. He quit his well-paid job and bet it all on his online bookstore (including his parents' savings which help him to fund this adventure)

    But, why sell books and not something else? Was it a matter of personal taste? A hobby? Love for culture?

  • Since the beginning, the choice was really meditated. According to Jeff Bezos, when he was deciding what he wanted to sell, he made a matrix of cheap and high-demand products. Books were in the middle of both axis, thus he chose that niche.
  • INSIGHTS: An product-based strategy help us to define the business idiosyncrasy. Before opening a business, it’s advisable to investigate the pros and cons of what we’ll be selling, without forgetting about the potential penetration the product will have in the different channels.

  • Amazon origins

  • The success was almost instantaneous. The company was founded in a Garage (literally). And in just two months, Amazon was selling 20,000 dollars per week and was present in the 50 U.S. States and in more than 45 different countries.

    It was something virtually unprecedented, and for Bezos, part of a business model based on the catalog deepness from the start, when it already offered more than a million of titles.

    Obviously, in the beginning, it was light years from what it is today, but he was decided on turning his company into the “The biggest bookstore of the whole world”. And from that point, the motto passed to be part of his philosophy.

  • INSIGHT: We need to know how to get the most out of channels. Amazon shattered their physical competence, which depended on its premises that were much more limited in terms of its geographical distribution capacity.

  • Its first competitors

  • Now that we’re talking about competitors, it is interesting to study what happened to Amazon’s competitors.

    At the online level, it’s not even worth it to mention who they were as none of them were a threat to Amazon. However, there were some strong offline competitors, such as Barnes & Noble, which had (and still have) one of the biggest book networks in the United States and, thus, in the world. Barnes  & Noble was established in 1873 and since then, its Business model has only changed a bit.

    It’s striking that, having everything within reach to evolve from a dominant position in the market, they let themselves be surpassed by a newly created company with no trajectory or specific interest in literature beyond the business.

    With some frustration, Barnes & Noble even said that Amazon was not the world’s biggest bookstore, it even said Amazon was no bookstore but a book broker in reference to Amazon’s business model

  • INSIGHTS: The agility and wide vision can unbalance in our favor a market situation in which there are much stronger and consolidated players than us.  

  • This is the first release of the Amazon Success Story. On the next one, we will go deeper into its business model evolution, its new competitors and how did it developed, but to understand what came next, it was necessary to know first its origins. Don’t miss the next release!
  • Read the complete series.

    Images | Amazon, Unsplash, Google Trends.

Laia Ordoñez

Laia Ordóñez is a copywriting & eCommerce content marketing expert. She is Content & Marketing Manager at DueHome, a copywriting & content independent advisor, and Oleoshop's blog's editor-in-chief.

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