Amazon takes the most customer-oriented service philosophy and aims to provide customers with the fastest, most convenient, and easiest-to-use services, which embodies the fundamental humanization principle of Amazon culture. . Now I will unravel the business model of Amazon.com for everyone, I hope it can help you. Amazon.com's business model
The world's largest online bookstore, Amazon Online Bookstore, started making profits at the end of 2002, which is good news for the development of global e-commerce. Since its opening in the United States in July 1995, the American Amazon online bookstore has experienced seven years of development. By the end of 2002, 40 million Internet users in 220 countries around the world had purchased goods from Amazon's bookstore, and the total number of goods provided by Amazon to consumers has reached more than 400,000. As the development of e-commerce has suffered setbacks in recent years, and many followers have fallen away, Amazon has survived tenaciously and stood out, creating exciting performance: net sales in the third quarter of 2002 reached 8.51 billion, an increase of 33.2% over the same period last year; net sales in the first three quarters of 2002 reached US$2.504 billion, an increase of 24.8% over the same period last year. Although there was no profit in the first three quarters of 2002, the net loss was US$152 million, a decrease of 73.4% from the same period last year. The sales in the fourth quarter of 2002 were US$1.43 billion, with a net profit of US$3 million, which was Second profitable quarter. Amazon's turnaround is undoubtedly a huge encouragement to B2C e-commerce companies.
Why does Amazon’s banner persist even when e-commerce development generally suffers setbacks? What makes Amazon’s performance today? What does Amazon’s rapid development mean? Explore Amazon’s development with this series of questions and thoughts. After the process, we were surprised to find after research that it was logistics, which many people call the bottleneck and the biggest obstacle to the development of e-commerce, that saved Amazon. It was logistics that created Amazon's performance today. So what useful revelations can the study of Amazon’s survival and development experience bring to our current enterprises?
Revelation 1: Logistics is a means of Amazon’s promotion
In a world where e-commerce is struggling In recent days, Amazon has launched innovative and bold promotion strategies to provide customers with free shipping services, and continues to lower the threshold for free shipping services. So far, Amazon has used this promotion three times. The thresholds for the first two free shipping services were US$99 and US$49 respectively. In August 2002, Amazon lowered the threshold for free shipping by half and began to implement free shipping services for customers with a total shopping price of more than US$25. to promote sales growth. Free shipping has greatly stimulated people's enthusiasm for consumption, allowing Internet users who have doubts about e-commerce and worry about the high price of online shopping to quickly join the ranks of Amazon consumers, thus expanding Amazon's customer base to 40 million people. This has produced huge economic benefits: in the third quarter of 2002, sales of books, music and film and television products increased by 17% compared with the same period last year. The role of logistics in promoting and influencing sales, "Logistics is a tool for corporate competition," is best explained in Amazon's business practices.
For many years, the reality that online shopping is expensive has been the main factor that has caused consumers to abandon e-commerce and insist on choosing physical stores for shopping. It is also an important reason for e-commerce companies to lose customers and fail. At a time when e-commerce operations are in a critical moment, Amazon has taken a unique approach and boldly used logistics as a promotional tool. It competes at low prices with small profits but quick turnover, and uses logistics to occupy the market, attract customers, and expand market share. Obviously this strategy is correct because it captures the essence of the problem. According to a recent consumer survey by a market research company, online customers believe that delivery fee discounts during the holidays are far more attractive than any other promotional means. At the same time, this strategy has also proven to be successful. Since 2001, Amazon has generally reduced the prices of online products by about 10%, thus increasing its customer base to 40 million people, of which about 30 million people consume online. . For this reason, Amazon founder Bezos can confidently declare: Perhaps consumers will still go to physical stores to shop, but it will definitely not be because of the price. ?Of course, this business strategy also has risks.
Because if the resulting costs cannot be absorbed and the heavy financial burden is transferred, the success will be in vain. So how does Amazon solve these problems?
Enlightenment 2: Increasing revenue and reducing expenditure is the guarantee of Amazon’s promotional success
As mentioned before, the secret of Amazon’s profitability lies in the large purchases it provides to customers. Discounts and free shipping. However, this promotion strategy is also a double-edged sword: it increases sales while incurring huge costs. How to digest the resulting costs? Amazon's approach is to spare no effort to cut costs in financial management: reduce expenses, lay off personnel, use advanced and convenient order processing systems to reduce error rates, consolidate delivery and save inventory costs? Through Reducing logistics costs is equivalent to obtaining greater sales revenue with less promotional costs, and then giving it back to consumers to win more customers and form an effective virtuous cycle. Of course, this places high demands on Amazon's cost control capabilities and logistics system. In addition, while Amazon is cutting costs, it is also actively looking for new profit growth points, such as selling new and used goods online for other merchants and cooperating with many merchants to sell these merchants' brand products to Amazon customers and collect commissions from them. It allows Amazon customers to purchase many merchants' brands, products, and original books, music products, and other products in one stop. It not only provides customers with more products, but also attracts many consumers with its diverse choices and product information. Customers come to shop without adding additional inventory risks. It can be said that it kills two birds with one stone. These effective measures to increase revenue and reduce expenditure are an important guarantee for the success of Amazon’s low-price promotions.
Enlightenment 3: A perfect logistics system is the lifeblood of the survival and development of e-commerce
E-commerce is a transaction of goods and services based on modern information technology and computer networks, with transaction It has the characteristics of virtualization, transparency, low cost and high efficiency. In e-commerce, information flow, business flow, and capital flow activities can all be completed online through computers. However, logistics must go through a real operation process and cannot be virtualized like information flow and capital flow. Therefore, logistics as an integral part of e-commerce has become a key factor in determining the effectiveness of e-commerce. In e-commerce, if logistics lags behind, efficiency is low, and quality is poor, the advantages of e-commerce in economy, convenience, and speed will no longer exist. Therefore, a perfect logistics system is the lifeblood that determines the survival and development of e-commerce. Analysis of the reasons why many e-commerce companies fail is largely due to logistics failures. Amazon's success is also due to its success in logistics. Although Amazon is an e-commerce company, its logistics system is very complete and is not inferior to physical companies at all. Because it has a complete and optimized logistics system as a guarantee, it can use logistics as a means of promotion, and has the ability to strictly control logistics costs and effectively organize and operate the logistics process.
Amazon also has many unique features in these aspects:
It adopts an outsourcing approach in selecting delivery modes.
In e-commerce, Amazon entrusts its domestic distribution business to the United States Postal Service and UPS, and entrusts international logistics to professional logistics companies such as international shipping companies, while it concentrates on developing its main and core businesses. This can reduce investment and business risks, and make full use of the advantages of professional logistics companies to save logistics costs.
Control inventory at the lowest level and implement zero inventory operation.
Amazon achieves effective control of inventory by establishing good cooperative relationships with suppliers. Amazon keeps very few books in stock, keeping only the 200 most popular bestsellers in stock. Typically, Amazon purchases books from publishers after customers place orders for them. Book buyers pay Amazon with credit cards, but Amazon only pays publishers 46 days after the books are sold, which makes its cash flow much smoother than that of traditional bookstores. By keeping inventory low, Amazon's inventory turns over quickly and have gotten faster since 2001. In the third quarter of 2002, the average number of inventory turnovers reached 19.4 times, while the number of inventory turnovers of Wal-Mart, the world's largest retail company, was only about 7 times.
Reduce the return rate.
Although Amazon operates a wide variety of products, it maintains a very low return rate because of the appropriate selection of product varieties, reasonable prices, product quality and delivery services that meet customer needs. The return rate of traditional bookstores is generally 25%, and can be as high as 40%, while Amazon's return rate is only 0.25%, which is far lower than traditional retail bookstores. The extremely low return rate not only reduces the company's return costs, but also maintains a high level of customer service and achieves good business reputation.
Provide convenience for the post office to send goods and reduce delivery costs.
In delivery, Amazon adopts a method called "postal injection" to reduce delivery costs. The so-called "postal injection" means using your own truck or an independent carrier to transport the entire truckload of ordered goods from Amazon's warehouse to the warehouse of the local post office, and then the post office delivers it to the customer. This eliminates the post office's procedures and steps for handling goods, provides convenience for the post office to send goods, and saves you money. According to a delivery company that cooperates with Amazon, the money saved by this "postal injection" method is equivalent to 5% to 17% of the ordinary price of first-class mail, which is very considerable.
Establish different distribution centers according to different product categories to improve the efficiency of distribution center operations.
Amazon’s distribution centers are set up according to product categories, and different products are distributed by different distribution centers. This will help improve the professionalism of the distribution center and simplify and standardize the operation organization. It can not only improve the efficiency of the distribution center, but also reduce the management and operating costs of the distribution center.
Adopt "combination packaging" technology to expand transportation batches.
After the customer confirms the order on Amazon's website, he or she can immediately see whether the Amazon sales system has the goods in stock according to the customer's order, as well as the selected shipping method, estimated delivery date and delivery date. Delivery date and other information. As mentioned before, Amazon has established different distribution centers according to product categories, so different products ordered by customers are shipped from different distribution centers located in different locations in the United States. Since Amazon's distribution center only maintains a small amount of inventory, after receiving an order from a customer, Amazon needs to check the inventory in the distribution center. If the distribution center does not have the goods in stock, it must order from the supplier. Therefore, some items on the same order can be shipped immediately, while others need to wait. In order to save customers waiting time, Amazon recommends that customers do not put products that need to wait and products that are in stock in the same order when ordering. In this way, when shipping, the carrier can pack goods of the same category from different customers and that are also in stock at the distribution center into the same truck for shipment, thereby shortening the waiting time after the customer orders, expanding the transportation batch size, and improving transportation efficiency. , reduce transportation costs.
Perfect shipping terms, flexible and diverse delivery methods, and accurate and reasonable charging standards reflect the scientific and standardized Amazon distribution management.
Amazon’s shipping terms are very complete. On its website, customers can get the following information:
Shipping of auction items, delivery time estimates, free super savings shipping, In-store picking, goods requiring special handling and handling, recycling of packaging, special requirements for shipping, shipping rates, shipping restrictions, order tracking, etc.
Amazon provides customers with a variety of delivery methods and delivery periods to choose from. In terms of delivery methods, there are "standard delivery" with land transportation and sea transportation as the basic transportation methods, and there is also air transportation. In terms of delivery period, standard delivery, 2-day delivery, and 1-day delivery are used depending on whether the destination is domestic or overseas, and whether the ordered product is in stock. Depending on the delivery method, delivery period and product category, different charging standards are adopted. There are batch fees charged at a fixed rate, piece fees charged based on the number of pieces, and fees charged based on weight.
All of this shows that Amazon’s distribution management is scientific and legal, and its operation organization is standardized and refined. It provides customers with convenient, thoughtful and flexible distribution services and satisfies the diversification of consumers. need. Amazon has established a good image in the minds of customers with its low prices and convenient services, increased customers' trust, and enhanced their confidence in future development.
In short, Amazon has given us many enlightenments, the most important of which is that logistics plays a vital role in the development of e-commerce. Some people call the rapid development of Amazon the "Amazon Myth". If Chinese e-commerce companies can regard logistics as their development strategy in their business development, rationally plan the company's logistics system, set correct logistics goals, and effectively carry out logistics organization and operation, then for Chinese e-commerce companies, the Amazon myth will no longer be far away. Brand expansion of Amazon.com
The 21st century is a century of brand verticality. Brands have become the most potential assets of enterprises. Brand expansion has become an effective way for enterprise development and brand growth. Many companies use brand expansion to increase sales and grow the company, and have achieved good economic and social benefits. However, some companies operate blindly in brand expansion and lack strategies, which has adverse effects that are not conducive to corporate and brand development. , but was trapped and scarred by it. Brand expansion is a science and a technology, and it also requires technical means.
With the shift in consumer demand, e-commerce and online shopping have become popular in the market. In order to better meet the needs of consumers, Joyo Amazon, China's largest comprehensive online shopping mall of authentic products, has been continuously expanding its product categories and deepening its brand expansion strategy, always providing consumers with the richest products at low prices every day and the most convenient shopping experience.
At present, Joyo Amazon can provide consumers with books, music, movies and television, mobile digital products, home appliances, home furnishings, toys, health, beauty and makeup, watches and jewelry, clothing and bags, shoes, sports, maternal and infant products. , food and other 28 categories, with more than 2 million kinds of goods, and provides consumers with the guarantee of genuine licensed products for online shopping through direct cooperation with manufacturers, brand strategic cooperation, and vigorous development of private brands.
Among them, Joyo Amazon not only enables consumers to purchase a wider range of high-quality products without leaving home, but also has more advantageous prices than other offline channels through brand cooperation with suppliers. This kind of brand expansion includes, for example, joining hands with fashion brands to launch online brand stores for female consumers, forming partnerships with top sports brands to provide sports boutiques for sports enthusiasts, and cooperating with well-known car navigation brands to enter auto supply stores to facilitate car owners.
In addition, following the launch of Amazon’s own brand Amazon Baseus in China for the first time in 2009, in January this year, Amazon once again made efforts to expand it into three major brands: burnable discs, optical fiber cables, and digital accessories. A specialty store with categories and thousands of items. Recently, Joyo Amazon announced the official launch of the Amazon Baseus store. The specialty store provides HDMI cables, burned discs, mobile phone accessories, camera accessories, computer accessories and other accessories*** in six categories of basic consumer electronics. Joyo Amazon's private brand development strategy provides users with more choices of high-quality and low-priced basic electronic consumer products, and also injects new impetus into China's basic electronic consumer market.
Amazon Baseus, as Amazon’s own electronics brand, has achieved impressive results and user recognition in the United States, Japan and European markets. Amazon Baseus high-speed braided insulated HDMI cable (3 meters) has become the number one electronic consumer product list on Amazon in the United States. Fiber optic cables have become the star category of Amazon Baseus and the main purchased product in the cable and wire category.
In addition to the eye-catching optical cable products, Amazon Baseus’ digital accessories and burnable discs are also favored by domestic consumers.
At present, Amazon Baseus provides thousands of products to domestic consumers. Since the expansion of products at the beginning of the year, Amazon Baseus hard small electrical universal portable bag has achieved a monthly sales increase of 200%. Although Amazon Baseus is still in its infancy in China, it has always been committed to providing consumers with the best shopping experience. In addition to the highest quality standards for similar products in the industry, Amazon Baseus also insists on continuous innovation.
On the occasion of the launch of the Amazon Baseus store, silicone cases, protective bags and other products for iPhone 4 and iPad will be fully online, which is expected to attract the attention of a large number of Apple fans.
Faced with the current situation of uneven electronic products in the domestic basic electronic consumer market, Amazon Baseus adheres to high standards of product quality and the principle of "low price every day". All product lines are manufactured in China and enjoy 30 The service of unconditional returns and exchanges within one day and repair of quality problems within one year has injected a shot in the arm into the basic electronics consumer market.
Today, with the continuous development of market economy, brand represents the market owned by the enterprise and, to a certain extent, also represents the strength of the enterprise. Brands need to be cultivated and require long-term investment in patience, courage, financial and material resources. How to develop and utilize existing brands and better play the role of brands is an indispensable issue in corporate business strategies. In fact, using brand resources to implement brand expansion has become the core strategy of corporate development and is also a commonly used strategy in the corporate world to develop and utilize famous brands. The development status of Amazon.com
Amazon is located in Phoenix, Arizona, USA. Amazon is developing into diversified product sales. The products sold range from music retail CDs, video tapes and DVDs, software, Home appliances, kitchen items, tools, lawn and yard items, toys, apparel, sporting goods, gourmet foods, jewelry, watches, health and personal care items, beauty products, musical instruments and more.
In January 2004, Amazon launched a special event for presidential candidates, encouraging customers to donate from US$5 to US$200 to their ideal US presidential candidates as campaign funds. In 1999, Bezos became Time Magazine's Person of the Year for his successful business strategy.
On July 8, 2009, Amazon’s official website Amazon.com was blocked. The government did not give any reason for the lockdown. You can currently log in, but Amazon's website IMDb is still blocked.
On March 15, 2010, Joyo Amazon, an online mall with 23 categories and more than 1.2 million products, released the "Online Shopping Integrity Statement White Paper", which mainly focuses on the current common concerns of consumers in online shopping. The issue of genuine products and returns and exchanges will be explained in detail regarding the pre-sales and after-sales integrity guarantees. Excellence Amazon believes that online shopping integrity is mainly divided into "pre-sales integrity" and "post-sales integrity". Pre-sales integrity refers to consumers’ trust in the online mall brand and whether each product is authentic. In this regard, Joyo Amazon has launched a promise to consumers of "everyday low prices and guaranteed authenticity". Wang Hanhua, President of Joyo Amazon, explained: As the Chinese site of Amazon, the online retailer with the largest variety of products in the world, Joyo Amazon has authenticity guarantees for various products such as digital software, home appliances, 3C, toys and gifts. ?