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Value Chain Analysis of Amazon

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 Value Chain Analysis of Amazon

The value chain analysis is a very important process that has the ability to create newer ways for

a business to develop its various sectors and improve the quality of its products which ultimately

increases the profit margin. These upgrades and improvements happen through various activities

and procedures that have a positive effective outcome to the business as a whole which include

developments on the firm infrastructure, technological advancements and human workforce

alongside the procurement that is governed by the supply chain department. Amazon, which is

one of the most prominent shopping websites, has been working in the fields of logistics

intensely in order to provide and deliver the best quality of products at the least amount of time

to its customers. In this essay, I will be shedding light on Amazon’s value chain and the way it

provides goods to its customers.

One of the most important challenges of the Amazon value chain is letting suppliers and original

equipment manufacturers add their own products and businesses in the Amazon website and

include their stocks in Amazon inventory in order to become a verified seller. Most of the times,

these sellers are middlemen who only add up unnecessary price and divert the buyer from buying

from the original manufacturer and supplier. They create a problem for both the supplier and for

Amazon as they are mostly professional people that can make their pages look absolutely real

which is how they deceive people. On the other side, products are going to be included in

Amazon Fulfilment and can be delivered through the Amazon logistics web of delivery. “Sellers

can also use FBA by stowing their inventory in Amazon fulfilment centres. In this case, Amazon
assumes full responsibility for logistics, customer service, and product returns. If a customer

orders an FBA item and an Amazon owned-inventory item, the company ships both items to the

customer in one box, as a significant gain of efficiency” (Dudovskiy, 2020). These can include

same day delivery which is a very intricate and complex process that allows the buyer to receive

its ordered goods to be received in the shortest amount of time possible. What makes these things

possible is the ever growing business of Amazon that has been one of most profitable companies.

Amazon also tries to increase its value chain through obtaining customer satisfaction as they

know if a customer feels happy about requesting a product upto the delivery and the overall

process which should be done in the most convenient way, the customer will most likely make

another purchase and also advertise for the company as well.

One opportunity for brands selling on Amazon is that Amazon not only provides logistics

services to its own firms but also to other companies as well upon request which is how they are

able to expand their network of communication and bond creation in order to have a more

substantial stance in the marketplace. By having the other small scale businesses depend on

itself, it will present its dominance in the marketplace. “Amazon uses logistics beyond the point

to serve Amazon Marketplace and starting from recently, the company has been offering logistics

services to others. For example, Beijing Century Joyo Courier Services, an Amazon subsidiary

registered with the U.S. government as an ocean shipping provider” (Schreiber 2016). Amazon

has always been an entrepreneur in the field of goods delivery and logistics due to their

ever-expanding network of sub-bases in the different parts of the world that further ease the

processes of delivery from door to door. This supply chain process is what keeps a value chain of
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a company to grow and expand through generating more bonds and more connections that

further increase the value of the company and of the products as well. For example, a product

that is produced by a renowned company that has immersed itself within its products quality and

dependability will have a much higher value than one produced by another company which is not

as famous as theirs even if their products were somewhat similar in their characteristics. The

former company has had its own name and fame which is why they are able to sell at a higher

price and people would still be into paying for it.

In conclusion, the value chain of Amazon is considered one of the most successful ones due its

intense network of divisions in the various parts of the world each of which contribute to the

increase in the company’s overall value chain.

Works Cited

Dudovskiy, J. (2020, April 03). Amazon Value Chain Analysis - Research-Methodology.

Retrieved May 23, 2020, from https://research-methodology.net/amazon-value-chain-analysis/

Schreiber, Z. (2016) “Is Logistics About To Get Amazon’ed?” Tech Crunch, Available at:

https://techcrunch.com/2016/01/29/is-logistics-about-to-get-amazoned/