Amazon ECommerce Success Story- Learnings

In the ecommerce space nothing fascinates me more than the Amazon.com success story. Started in 1995 this little bookstore has become a giant and is bringing disruptions constantly and changing the landscape.

If you have followed the Amazon story it has some key insights as to how to build a great e-commerce platform:-

Customer at the Center Approach
Since it's inception, Amazon has kept it's core vision intact which is to keep Customer at the center of it's business model. Rather than focusing on their competition they focus on their customers and instead want competitors to focus on them. The Customer Centrist approach has worked for them and remains their key strategic driver till date. They believe that a positive "word of mouth" is the most essential thing if you have to survive in an online business, no wonder Amazon ranks very high in Customer Satisfaction surveys.

Scale is Key
Amazon realized that you can't survive in a small to medium eCommerce business as your fixed costs are high and essentially your software will cost the same if you are serving to 10 versus Million of customers. Providing users with vast selection is still their core promise and they keep working at it. Their logo signifies that they sell practically A to Z.

Diversification
As stated earlier, Amazon has added many categories and has a vast selection, starting as a book store it has diversified into multitude of categories and practically sells everything. Diversification is also a key reason why they have repeat customers buying all the items from them (The delight their customers and these customers come again and shop the same thing or shop more of different things with them)

Innovation
Amazon has kept things simple and invested in great ideas to meet customer needs (Prime, Kindle and now Drones) are all excellent innovations and a great testament as to how Amazon has captured the imagination of the users. Their ecommerce platform is the best in the world handling multi Billion global transactions.

Believe in the Idea and give it time
From 1995 to 2003 Amazon was in loss but had the Management team knew very well that they were doing the right thing. When they started to compete with Barnes and Nobel to meet the Purchasing Power of Barnes and Nobel they operated at lower margins to make sure price was not a differentiation and then slowly scaled the business model to not only challenge the physical book stores but to become the internet of selling everything.

Amazon stock
Amazon has created tremendous shareholder wealth. It was trading at 27 Dollars/Share in 2003 and is currently trading at 1000 USD.