1. “Amazon.com named after the
BIGGEST river in the world”

2. We see our customers
as invited guests to a
party, and we are the
hosts. It's our job
every day to make
every important
aspect of the customer
experience a little bit
better.
Jeff Bezos
N
INNOVATIO
N
INNOVATIO

3. AMAZON
History
History
• Founded : 1994 Seattle Washington, U.S.
Founder : Jeff Bezos
• “Anything they might want to buy on
internet”.
• Web's most successful pure online retailer.
• “Internet was evolutionary , only the big early
on company would survive”
Jeff Bezos.
• Started with selling books, CDs and DVDs.

4. History
• Pass through explosive early growth, huge
loss, then on to profitability
• First profitable quarter in fall 2002, first
profitable year in 2003.
• Face a big fluctuation from 1999-2008.
• Stock price swing from $6 - $105 per share.
• Sites in US, Japan Germany, UK, French and
Canada.
History
• In 2002, Diversified to other products.
• Objective
“Offer the Earth’s biggest selection and the
be Earth’s most customer-centric company
where customer can find and discovery
anything they may want to buy.”

5. History
• Path to Success Feature Rich content
Lowest Price. User's review content
Best Selection. Fast , Reliable
Convenience. Ease of use
• Millions of Unique new ,used and collectible
items
• 11 Major Categories of Goods
“To be Shopping Portal”
• Provide online shop who rents Space from
Amazon
• Bring user to other places on Web , if things
are not found on Amazon.
• Competition
• Market Place : Ebay
• Portal : Yahoo ,MSN and Google.

6. AMAZON
VISION
STATEMENT
Vision
To be earth's most
customer centric
company; to build a
place where people
can come to find and
discover anything
they might want to
buy online

7. AMAZON
BUSINESS
MODEL
1994 - 2000
• From Brick-and-Mortar to E-tailer
• 1 Click Shopping
• From 1 department to 10 departments
• Acquire many other business company
– IMDB
– Alexa
– A9

8. 2003
2003
A9.com > Product Search
• Customer-Focused
• Search Inside The Book
Clickriver Ads > Advertising Network
• Interface like Google Adwords
• Matching Services to Content
2006
2006
March introduces Amazon Web Services
• Simple Storage Service (S3)
• Elastic Compute Cloud (EC2)
• Simple Queue Service (SQS)
• SimpleDB
• Flexible Payments Services (FPS)
• Amazon Mechanical Turk

9. Model I :
RETAILER

10. Model I : Retailer
Offer customer 3 things
• Lowest price
• Best selection
• Convenience
Model I : Retailer
Offer new, used, collectible
item of 11 category :
• Books
• Movies, Music & Game
• Digital Downloads
• Computers and Office
• Electronic

11. Model I : Retailer
Offer new, used, collectible
item of 11 category :
• Home and Garden
• Grocery, Health and Beauty
• Toys
• Kids and Baby
• Sport and Outdoors
• Tools, Auto and Industrial
Model I : Retailer
• Cookies
• Recommend

12. Model I : Retailer
• Search Engine
• Information
Model I : Retailer
• Customer Review
• Ranking

13. Model I : Retailer
• Free Shipping over $25 (for some item)
• Amazon Prime : paid $79 Annual Fee to get
2-Day shipping free.
• Traceable Order
Model II :
MARKET CREATOR

14. Model II : Market Creator
Merchant service
Enable 3rd parties to integrate their products into
Amazon’s web site and use Amazon’s customer
technologies (started on 2002)
• Amazon Market place (individual and small
business)
• Merchants@ program (large and branded
business)

15. Model II : Market Creator
• Amazon Market place
– Only product in Amazon’s category
Model II : Market Creator
Amazon Market place
- Merchant must register
- Merchant’s product will show on Amazon’s site
- Amazon Collect Money (include Shipping cost)
- Merchant ship product to customer (Amazon will
support transaction cost)
- Amazon take $0.99 + referral fee 6%-15%

16. Model II : Market Creator
• Merchants@ program
Model II : Market Creator
• Merchants@ program
– Paid $39.99 per month + Referral Fee
– Merchant Upload their Inventory

17. Model III :
SERVICE PROVIDER
Model III : Service Provider
• Fulfillment By Amazon (FBA)
• Payment Solution

18. Fulfillment by Amazon (FBA)
• Store your products in Amazon's fulfillment
centers, and we directly pack, ship, and
provide customer service for these products
Fulfillment by Amazon (FBA)
• There are no additional set-up charges or
subscription fees
• Fulfillment fees vary depending on the type of
item (Media or non-media), its dimensions
and weight, and the shipping method used

19. Payment Solution
• Checkout by Amazon
• Amazon Simple Pay
• Amazon Flexible Payments Service (FPS)
Checkout by Amazon™
• Use shipping addresses and payment methods
stored in their Amazon.com accounts
• Pricing : Fees are assessed on a per-
transaction basis. There are no start-up
charges, monthly charges, hidden fees, or
long-term contracts

20. Checkout by Amazon™
• Use Amazon's 1-Click® and other tools for
sales and post-sales activities
• Express Lane Checkout Experience
• 1-Click® Checkout Experience
• Amazon PayPhrase Experience
• Standard Checkout Experience
1-Click® Checkout Experience

21. Amazon Simple Pay
• Use shipping addresses and payment methods
stored in their Amazon.com accounts
• Pricing : Fees are assessed on a per-
transaction basis. There are no start-up
charges, monthly charges, hidden fees, or
long-term contracts
• Payment occurred at Amazon Website
Amazon Simple Pay
• Amazon Simple Pay Standard
• Amazon Simple Pay Subscriptions
• Amazon Simple Pay Donations
• Amazon Simple Pay Marketplace

22. Amazon Simple Pay Standard
Amazon Flexible Payments Service (FPS)
• Offers developers unmatched flexibility in
how they can structure payment instructions.
These instructions impose conditions and
constraints on money movements and can be
set by both senders and receivers of funds

23. Amazon Flexible Payments Service (FPS)
• Accept one time payments on your website
• Execute periodic or delayed payment features
required by subscription
• Facilitate transactions between a buyer and a
third party seller
Model IV :
ADVERTISEMENT

24. Model IV : Advertisement
• Product Ads on Amazon
• Advertise with Amazon
• Advertising for Service Providers
Product Ads on Amazon
• Product Ads is an
advertising program
that puts your products
in front of millions of
Amazon.com
customers.As a seller,
you simply upload your
product catalog and set
your cost-per-click bids
and daily budget.

25. Advertise with Amazon
• Advertise your
products through
online product ads,
online display
advertising or offline
package inserts.
• List your services
next to related
products
Advertising for Service Providers
• Clickriver Ads offers the unique opportunity to
promote your services

26. Model V :
WEB SERVICE
Model V : Web Service
• To utilized the $s billon Amazon’s technology
– Simple Storage Service (S3)
– Elastic Computer Cloud (EC2)
– Simple Queue Service (SQS)
– SimpleDB

27. Model V : Web Service
Model V : Web Service
• WebStore
– Create Web using Amazon’s Framework

28. Model VI :
AFFILIATE
Model VI : Affiliate
• Amazon Mechanical Turk
– Provide a marketplace for work that requires
human intelligence
– offers access to a virtual community of workers
that are available to help you accomplish your
business goals. A robust set of APIs and command
line tools enable you to programmatically
distribute tasks that require human intelligence to
a widely distributed, on-demand workforce

29. AMAZON
BUSINESS
PERFORMANCE
Business Performance
• revenue primary from selling products
– 65% from media sales like books, CDs, DVDs and music
from streaming service.
– In 2007, 62% of its revenue ($9.2 billion) is from the sales
of media, only 37% from electronics and other general
merchandise.
– Still not yet achieved the product diversification of offline
mass-market merchants such as Wal-mart, Costco or
Sears.
• International Organization
– In 2007, $6.7 billion from Amazon is 45% of $14.835 Billon
of gross revenue offshore, which grew up by 39% in sales.

30. AMAZON
BUSINESS STRATEGY
Business Strategy
• Maximize growth in sales volume
– free shipping for Amazon’s retail (increase order
size by 25%)
– shorter order fulfillment times
– Accelerated shipping
– greater product selection
– Amazon Market place and Merchants@ program.
– Amazon’s syndicated stores program

31. Business Strategy
• cutting prices to the bare bone
– optimized the location of storing goods, size of
shipment
– consolidate order into larger batches
– use “Postal injection” (trucked package to U.S
Postal system center)
AMAZON
COMPETITION

32. Competitors
• E-tailer Dimension
• Web Portal Dimension
E-tailer Dimension
• Direct - Online
– Clicks: eBay.com, buy.com
– Bricks-and-clicks: Wal-Mart, Target
• Indirect - Offline
– Retailers (Physical stores)

33. Web Portal Dimension
• Yahoo
• MSN
• Google
• etc.
AMAZON
SOCIAL AND
LEGAL CHALLENGE

34. Lawsuit – Toys “R” us
• Toy “R” us sued Amazon over what it claimed
was its exclusive right to sell toys on Amazon
• Toy “R” us claimed 4000 items is slipped
through the cracks.
• Toy “R” us won suit against Amazon
Variable Pricing
• Charges different prices for the same
products depending on who visits, and that's
hacking off some loyal customers
• This leads to creating unequal !!
10? 20? 15? 17?

35. AMAZON
FINANCIAL ANALYSIS
Income Statement

36. Income Statement
• Year over year, Amazon.com Inc. has been able to grow their bottom line
from $476.0M to $645.0M primarily through revenue growth ($14.8B to
$19.2B).
• Offer best services such as FREE Super Saver Shipping, Fast delivery
• Offer the Earth’s Biggest Selection and to be Earth’s most customer-centric company
where customers can find and discover anything they may want to buy
• Heavily on affiliates and third party merchants to drive sales (no increase in marketing,
administrative cost)
• For while the costs associated with cost of goods, Selling General &
Admin Expense and income tax all increased as a percentage of sales but
eliminating marketing in offline magazines and TV.
• Interest expense also decreased as a result of decreasing in Long Term
Debt
• The growth in top line revenues contributed enough to still see net
income improve
Income Statement - Quarterly
Drop in Q2 2009 came from payment to Toys
"R" Us $51 million to settle a lawsuit filed by the
toy retailer in May 2004.

37. Income Statement
Balance Sheet

38. Balance Sheet
• This company's debt to total capital ratio, at 19.90%, is in-
line with the Internet and Catalog Retail industry's norm
• Operating Profits are more than adequate to service the
debt.
• Amazon stretched out its bill-payment resulted in
accounts-payable days have risen from 49.25 days in 2003
to 59 in 2008 before jumping to an average of 64.6 so far in
2009.
• Free cash flow has grown to $1.36 billion in 2008 from $346
million in 2003.
The stock has been erratic over this recent 10 years; however, it seems to
be a upward trend

39. AMAZON
FUTURE PROSPECTS
Business Model Innovation
“The key to sustained success is
business model innovation”

40. Amazon Giver
Amazon Grapevine

41. Amazon Giver & Grapevine - Benefits
•See the Amazon wish list of your friends via
Facebook
•See the Amazon activities of your friends via
Facebook, e.g. Product review, rating, etc.
•Currently, It’s no longer
Facebook and AWS

42. Sanptell
Snaptell - "Accumulated Signed Gradient" (ASG).
Snaptell - Benefits
• New way of Product Search
• Easy to find product you see

43. Kindle
• E-book reader
Kindle - Benefits
• Pricing Advantage (Lower Price)
• Immediate Delivery Book
• Handy

44. Amazon Affiliate Program
Amazon Affiliate Program - Benefits
• Earn commission up to 15%
• Expand channels around the world
• Similar to Google Adsense

45. Affiliate Program
“The answer, we believe, is that Jeff Bezos
understands that the key to sustained success is
business model innovation”
Josh Suskewicz,
INNOSIGHT