AMAZON

#1 Best Internet & Social Media Ment

#1 Best Retail Companies

At a Glance

Uppers

Leading internet retail company with over 137 million active customer accounts

Reputation for low prices and reliability

Downers

Lack of charitable corporate giving in past years

Employees often work long days and overtime hours, especially during the holidays

The Bottom Line

A well-respected company that is an industry leader in new products and technology.

Read More Reviews

About Amazon.com, Inc.

Amazon.com began as a bookstore, and becomes a store for almost all products. Its website still offers
millions of books, as well as other media, home furnishings, clothing, pet supplies, office products,
health and beauty, jewelry, consumer electronics, software, lawn and patio, grocery, automotive
products and hundreds of other product categories. In terms of electronics, Amazon manufactures and
sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, and other devices, and develops
and produces media content. The company is also the dominant cloud services provider (through
Amazon Web Services, or AWS), an influential entertainment company through its video streaming
operations, a force to be reckoned with in grocery with its ownership of natural foods chain Whole
Foods, and a leader in digital personal assistant devices with Alexa and its Echo product line.
Amazon.com, Inc. Was incorporated in 1994 in the state of Washington and reincorporated in 1996 in
the state of Delaware.

Operations

Amazon.com organizes reporting of its operations into three segments: North America (about 60% of
revenue), International (nearly 30%), and Amazon Web Services (AWS, about 15%).

Its North America segment includes retail sales and subscriptions sold via North American-focused
websites, as well as through Whole Foods grocery stores, while the International segment includes the
operations of internationally-focused websites such as Amazon sites serving the UK, Spain, Japan, and
other countries. AWS includes global revenue from its cloud, storage, database, and other services.

Stepping back from the geographic reporting, online sales, including products sold on behalf of third-
parties, account for about 70% of Amazon’s total revenue. Whole Foods physical stores generate just
under 10% of revenue, with the company’s subscription services – annual and monthly fees associated
with Amazon Prime membership, as well as audiobook, e-book, digital video, digital music, and other
services – contributing more than 5%.

In terms of fulfillment costs, it is consist of those costs incurred in operating and staffing in North
America and International segments’ fulfillment centers, physical stores, and customer service centers,
including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking,
packaging, and preparing customer orders for shipment and other ways.

Geographic Reach

The US is by far Seattle-based Amazon.com’s largest market by sales (about 50%), with Germany, the
UK, and Japan the top three international markets. Amazon has more than 175 operating fulfillment
centers and more than 150 million square feet of space where associates pick, pack, and ship millions of
Amazon.com customer orders to the tune of millions of items per year. Specifically, in North America,
Amazon currently has more than 110 operational facilities with a variety of employment opportunities.

Sales and Marketing

Amazon.com serves consumers like sellers, developers, enterprises, and content creators. In addition,
Amazon provides services, such as advertising to sellers, vendors, publishers, and authors, through
programs such as sponsored ads, display, and video advertising.

Its AWS segment targets businesses of all sizes, government agencies, schools, and other entities.

Financial Performance

It is a bit of an understatement to call Amazon.com’s recent revenue growth strong. Amid a boon in
online shopping, the company’s sales have rocketed more than 160% since 2015. Net income had been
slightly more volatile amid heavy investments, but that figure has exploded in the past three years.

The company reported a 20% increase in 2019 to $280.5 billion. All three segments grew that year, with
North America adding about $29.4 billion.

Amazon posted record net income for the fourth consecutive year with profit of $11.6 billion, up from
$10.1 billion the prior year.

Cash at the end of 2019 was about $36.4 billion, an increase of $4.2 billion from the prior year. Cash
from operations contributed $38.5 billion to the coffers, while investing activities used $24.3 billion,
mainly for purchases of marketable securities. Financing activities used another $10.1 billion as Amazon
made principal repayments of finance lease obligations.

Strategy

The business strategy of Amazon consists of focusing on investing in technologies, enhancing its logistics
applications, improving its web services by fulfillment capacity, M&A strategy, AWS segment, R&D
activities in logistics, and experimenting with Fintech.

Mergers and Acquisitions

One of the ways Amazon has achieved unprecedented growth and moved into new areas is through
acquisitions.
In 2020, Amazon and Zoox are pleased to announce an agreement for Amazon to acquire Zoox. Zoox is a
forward-thinking team that is pioneering the future of ride-hailing by designing autonomous technology
from the ground up with passengers front-of-mind.

In 2019 Amazon agreed to buy eero, a company that makes devices to blanket a home with Wi-Fi
signals, for an undisclosed amount. The deal could help Amazon in its quest to put devices like its Echo
digital assistant, Ring doorbells, and Blink security systems in customers’ homes. The routers made by
eero could ensure that voice-enabled assistants would work throughout a house, allowing the residents
to turn lights and appliances on and off with voice commands.

Company Background

Jeff Bezos founded Amazon.com in 1994. After months of preparation, he launched a website in July
1995 (Douglas Hofstadter’s Fluid Concepts and Creative Analogies was its first book sale); it had sales of
$20,000 a week by September. Bezos and his team kept working with the site, pioneering features that
now seem mundane, such as one-click shopping, customer reviews, and e-mail order verification.

Amazon went public in 1997.