AMAZON

E-BUSINESS REPORT
Group Members:
Muhammad Faizan
Faria Ali
Maham Ali

Submitted To:
Mr. Faaiz Ahmed Gilani
 Table of Contents
E-BUSINESS ..................................................................................................................... 0
Introduction .................................................................................................................... 4
History ............................................................................................................................ 4
General Information ....................................................................................................... 4
Products and Services ..................................................................................................... 5
Vision .............................................................................................................................. 6
Mission ........................................................................................................................... 6
Core Values ..................................................................................................................... 6
 Threat of substitutes available (high): ..................................................................... 7

 Threat of new entrants (low): .................................................................................. 7

 Rivalry in the industry (high):................................................................................... 7

 Bargaining power of Suppliers (low): ....................................................................... 8

 Bargaining power of buyers (high): ......................................................................... 8

Introduction .................................................................................................................... 9
Amazon Business Model Evolution .................................................................................. 9
Amazon according to Jeff Bezos’ Vision.............................................................................. 10
How Does Amazon Works? ........................................................................................... 10
How does Amazon make money?.................................................................................. 10
Amazon Operating Expenses ......................................................................................... 11
..................................................................................................................................... 12
Customer Value ............................................................................................................ 12
Scope ............................................................................................................................ 12
Internet Business Model ................................................................................................ 12
Competitors .................................................................................................................. 12
Price ............................................................................................................................. 13
Summary and Conclusion .............................................................................................. 13
How the Amazon Supply Chain Strategy Works? ........................................................... 14

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 Amazon Supply Chain: Warehousing ............................................................................ 15
Amazon Supply Chain: Delivery..................................................................................... 15
Amazon Supply Chain: Technology ............................................................................... 16
Amazon Supply Chain: Manufacturing .......................................................................... 17
Conclusion .................................................................................................................... 17
Amazon Primary Activities .............................................................................................. 18
Amazon Inbound logistics ............................................................................................. 18
Amazon Operations ...................................................................................................... 19
Amazon Outbound logistics .......................................................................................... 19
Amazon Marketing and Sales ........................................................................................ 19
Amazon Service............................................................................................................. 20
Amazon Support Activities ............................................................................................... 20
Firm infrastructure: ....................................................................................................... 20
Human Resource Management:.................................................................................... 20
Amazon’s procurement: ................................................................................................ 20
Technology: .................................................................................................................. 20
Business to Business (B2B) .................................................................................................. 21
What exactly is B2B Selling on Amazon? ....................................................................... 21
Who is Amazon Business for? ........................................................................................ 21
The 2 Programs of the Amazon B2B Marketplace ......................................................... 22
Business to Consumer (B2C) ................................................................................................ 22
Marketplace ........................................................................................................................ 22
Comparison .................................................................................................................. 23
Procurements Services by Amazon ................................................................................ 23
Safe Online Shopping .................................................................................................... 24
Do Not Share Personal Information ............................................................................... 24
Identify False (Spoof or Phishing) E-mails ...................................................................... 24
 Market Penetration Pricing for Startup .......................Error! Bookmark not defined.

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 Price Skimming for Innovation .....................................Error! Bookmark not defined.

 Bundle Pricing .............................................................Error! Bookmark not defined.

Context ......................................................................................................................... 25
Customization ............................................................................................................... 25
Communication ............................................................................................................ 25
Content......................................................................................................................... 26
Community ................................................................................................................... 26
Connection.................................................................................................................... 26
Commerce .................................................................................................................... 26
Leadership: ................................................................................................................... 27
Customer experience: ................................................................................................... 27
Legal Issues ................................................................................................................... 27
Disruptive Innovation and Competition ......................................................................... 27
Data loss and security breaches .................................................................................... 27
Shipping costs problem ................................................................................................. 28
Wal-Mart ...................................................................................................................... 28
Imitation of business model: ......................................................................................... 28
Counterfeit items: ......................................................................................................... 28
Geographic expansion .................................................................................................. 29
Healthcare .................................................................................................................... 29
Security: ........................................................................................................................ 29
Be nicer to its employees............................................................................................... 29
To address the issue of competition against large retail firms: ...................................... 29
Counterfeiting items: .................................................................................................... 29
Physical stores: ............................................................................................................. 30

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 COMPANY OVERVIEW
Introduction
Amazon.com Inc. is an American multinational technology company based in Seattle,
Washington that focuses on e-commerce, cloud computing, digital streaming and artificial
intelligence. It is considered one the Big Four technology companies along with Google, Apple
and Facebook.

History
Amazon was founded by Jeff Bezos on July 5, 1994 in Bellevue, Washington. The company
initially started as an online marketplace for books but later expanded to sell electronics,
software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon surpassed
Walmart as the most valuable retailer in the United States by market capitalization.

General Information
Founded July 5, 1994

Founder Jeff Bezos

Headquarters Seattle, Washington, U.S.

Products Amazon Echo, Amazon Fire, Amazon

Fire TV, Amazon Fire OS, Amazon Kindle
Services

Revenue Increase US$232.887 billion (2018)

Amazon distributes downloads and streaming of video, music, audiobook through its Amazon
Prime Video, Amazon Music, and Audible subsidiaries. Amazon also has a publishing arm,
Amazon Publishing, a film and television studio, Amazon Studios and a cloud computing
subsidiary, Amazon Web Services. It produces consumer electronics including Kindle e-
readers, Fire tablets, Fire TV, and Echo devices. In addition, Amazon subsidiaries also include
Ring, Twitch.tv, Whole Foods Market, and iMDb. Amazon has separate retail websites for
some countries and also offers international shipping of some of its products to certain other
countries

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Products and Services
Amazon.com product lines available at its website include several media (books, DVDs, music
CDs, videotapes and software), apparel, baby products, consumer electronics, beauty
products, gourmet food, groceries, health and personal-care items, industrial & scientific
supplies, kitchen items, jewelry, watches, lawn and garden items, musical instruments,
sporting goods, tools, automotive items and toys & games.

Amazon.com has a number of products and services available, including:

 Amazon Fresh
 Amazon Prime
 Amazon Web Services
 Alexa
 Appstore
 Amazon Drive
 Echo
 Kindle
 Fire tablets
 Fire TV
 Video
 Kindle Store
 Music
 Music Unlimited
 Amazon Digital Game Store
 Amazon Studios
 Amazon Wireless

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 VISION & MISSION

Vision
“To be Earth’s most customer-centric company, where customers can
find and discover anything they might want to buy online.”

Mission
“We strive to offer our customers the lowest possible prices, the best
available selection, and the utmost convenience.”

Core Values
These are Amazon’s core principles and core values that everyone acts by on their own:

 Customer Obsession
 Ownership
 Invent and Simplify
 Are Right, A Lot
 Hire and Develop the Best
 Insist on the Highest Standards
 Think Big
 Bias for Action
 Frugality
 Vocally Self Critical
 Earn Trust of Others
 Dive Deep
 Have Backbone; Disagree and Commit
 Deliver Results

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 PORTER’S FIVE FORCES
Amazon.com Inc. competes against a variety of firms, including smaller online retail stores
and large firms like Walmart. The global scope of the e-commerce business also exposes
Amazon to a diverse set of external forces. Thus, the company must ensure that it remains
resilient amid changes in the conditions of the online retail industry environment. The
following are the intensities of the external factors affecting Amazon, based on Porter’s Five
Forces Analysis model:

 Threat of substitutes available (high):

The threat of substitute products for Amazon is high. While a number of other brands
have also entered online retail, people can also buy from the physical retailers. The
only major competitive advantage of Amazon is its excellent customer service apart
from its brand name. The customers can easily switch from one brand to another.

 Threat of new entrants (low):

The threat of new entrants is low for Amazon. It is because the proliferation of digital
technology has brought several changes to the retail industry. A number of new
brands have entered e-retail. Now it is easier to build an e-retail business model with
the available technological resources. From Alibaba to Flipkart and e-bay several
national and international brands have emerged that are competing with Amazon.
Growth in digital technology has reduced the barriers to entry. However, to build a
brand like Amazon is very difficult because of the marketing and other expenses. Not
just this, the problem is that there are other strategic factors too which would require
the kind of dedication that Jeff Bezos has showed to build a brand.

 Rivalry in the industry (high):

The level of rivalry in the industry is high because the number of players in e-retail has
grown and there is also immense competition from the traditional retail brands.
Walmart and Costco are important competitors of the e-retail giant. Rivalry also gets
intensified in the retail industry by several other factors. It is not just the big brands,
but also the small brands that are fighting for market share and creating competitive
pressure. Some big non US brands have entered the US market and some more and
planning to enter and expand their presence fast. So, how the level of competition will
continue to increase for Amazon is not unimaginable.

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 Bargaining power of Suppliers (low):
The bargaining power of Amazon’s suppliers is low to medium. It is because Amazon
always has the upper hand when it comes to its supply chain. While the number of
Amazon suppliers is big, these suppliers have to do business according to the rules set
by Amazon. These suppliers have to follow the code of conduct that Amazon has set.
Some of the core areas that are Amazon’s focus in terms of supplier relationships are
as follows:

o Health and safety in production areas and any living quarters

o The right to legal wages and benefits
o Appropriate working hours and overtime pay
o Prevention of child labor or forced labor
o Fair and ethical treatment, including non-discrimination

 Bargaining power of buyers (high):

The bargaining power of buyers at Amazon is medium to high. Amazon focuses a lot
on customer satisfaction and product quality. Switching costs for the customers are
low and the number of Amazon competitors has grown in these years. Physical retail
is also creating pressures. Every customer has sufficient information when searching
for products online and can make his choice based on the available information. It is
why customer retention remains an important focus area for the e-retailer. The
bargaining power of Amazon buyers is high.

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AMAZON BUSINESS MODEL
Introduction
Amazon is the largest marketplace on earth. Even though the United States represented the
primary source of income for Amazon. It is expanding globally. Indeed, net sales have
increased since 2014.

Started in 1994 as a bookstore, Amazon soon expanded and became the everything store.
While the company core business model is based on its online store. Amazon launched its
physical stores, which generated already over five billion dollars in revenues in 2017.

Amazon Business Model Evolution

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 Amazon according to Jeff Bezos’ Vision
From Jeff Bezos’ 2016 letter to shareholders, it seems clear that he has one metric in mind
“Being on Day One!”

He has four main metrics to assess whether his company is on Day One, or is falling toward
Day Two:

 Customer obsession
 A skeptical view of proxies
 The eager adoption of external trends
 High-velocity decision making

How Does Amazon Works?

Amazon is a giant marketplace where each day billions of people find anything from the
website. According to the Similar Web estimates each day, only in the US Amazon has over
2.7 billion visits. On average those people spend more than six minutes on the site and look
at almost nine pages purchasing what they’re looking for.

That makes Amazon the fourth most popular site in the US. The Amazon business model
revolves around four main players:

 Consumers
 Sellers
 Developers and enterprises
 Content Creators

An effective business model to work properly has to involve and generate value for several
stakeholders. That applies to the Amazon business model as well.

How does Amazon make money?

It’s time to dive into the numbers to understand how the company works. When trying to
understand a business model, the revenues are a good starting point. But it’s also important
to look at other financial metrics to deeply understand what the real cash cow is. In fact, it’s
easy to be fooled to believe a company falls into a specific business model. However, numbers
don’t lie. Where does Amazon stand?

According to the infographic, you can see that Amazon makes most of its revenues from the
sales of products. However, those products sales also have high costs. Thus, the margins
Amazon makes on them is thin.

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Instead, if we look at the operating income, you can see how this is fueled by the services,
which comprise seller services, AWS, and subscriptions services.

In other words, by looking at the revenue, you might be fooled to think that Amazon is in the
product business, just like Apple, yet there is a slight difference between the two companies!

Amazon Operating Expenses

Amazon annual/quarterly operating expenses history and growth rate from 2016 to 2019.

 Amazon operating expenses for the quarter ending March 31, 2019 were $55.280B,
a 12.55% increase year-over-year.

 Amazon operating expenses for the twelve months ending March 31, 2019
were $226.631B, a 20.44% increase year-over-year.

 Amazon annual operating expenses for 2018 were $220.466B, a 26.88%

increase from 2017.

 Amazon annual operating expenses for 2017 were $173.76B, a 31.84% increase from
2016.

 Amazon annual operating expenses for 2016 were $131.801B, a 25.8% increase from
2015.

Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North
America and internationally. It operates through the North America, International, and
Amazon Web Services (AWS) segments. The company sells merchandise and content
purchased for resale from vendors, as well as those offered by third-party sellers through
retail Websites, such as amazon.com, amazon.ca, amazon.com.mx, amazon.com.au,
amazon.com.br, amazon.cn, amazon.fr, amazon.de, amazon.in, amazon.it, amazon.co.jp,
amazon.nl, amazon.es, and amazon.co.uk. It also manufactures and sells electronic devices,
including kindle e-readers, fire tablets, fire TVs, and echo; and provides Kindle Direct
Publishing, an online service that allows independent authors and publishers to make their
books available in the Kindle Store.

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Customer Value
Amazon.com creates value for its customers by offering customers broad array of products
to select from through their website and ensuring timely delivery of products to exhibit high
level of commitment towards their business and customers

Scope
The website is certainly aimed at a wide audience who are interested in internet shopping.
The range of items for sale that Amazon offers would suggest that they wish to target
customers of all ages from young to the old.

Internet Business Model

Clicks and Mortar

Competitors
Amazon Competitors In E-commerce Segment.

 Alibaba
 Walmart
 Otto
 Priceline
 eBay

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Price
Price on Amazon is frequently changing and unless you own your private label or custom-
made bundles, you need to maintain your listings’ prices repeatedly in order to stay in the
competition.

Here are three traditional pricing strategies that amazon uses:

 Market Penetration Pricing for Startup

Also known as penetration pricing strategy, this pricing policy is mostly used by
startups looking to break into the Amazon market. Penetration pricing involves
charging an amount lower than your competitors to attract customers when you’re
new to the Amazon world.
 Price Skimming for Innovation
This Amazon pricing strategy is usually for those sellers who are looking to introduce
something new to the amazon marketplace. Price skimming refers to initially raising
prices when you introduce a new invention or a non-existent item to the Amazon
marketplace. As more players enter the market, you gradually bring down your price
(while still charging more, preferably).
 Bundle Pricing
Bundle pricing is perhaps the most relevant for Amazonians. This Amazon pricing
strategy not only do increase amazon sales, but a great way to increase visibility for
your business. It’s selling multiple products together at a lower rate than what they
would cost if purchased separately.

Summary and Conclusion

Amazon is a tech giant. When it started back in the 1990s, it began as an online bookstore.
Today Amazon is the store that sells anything imaginable. As its founder, Jeff Bezos has
specified Amazon is a customer-centric company. However, it is clear that what made and
makes Amazon so compelling is the business model it and which generates value for several
players.

Consumers find products at a lower price and get them fast. Sellers can find new market
opportunities or decide not to carry any inventory. In fact, Amazon has its own fulfillment
center that manages the inventories for sellers. Thus, who’s thinking of Amazon as just an
online store has been fooled by its revenues, but has not bothered to look at how its business
model really works!

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 AMAZON SUPPLY CHAIN MODEL
How the Amazon Supply Chain Strategy Works?
Jeff Bezos and his organization (AMAZON) have found a way to optimize nearly every piece
of the supply chain puzzle – from warehousing and inventory management to delivery times
and prices.

They’ve even added drones, robots and other high-tech strategies into the mix.

Let’s break down the individual pieces of the Amazon supply chain strategy including:

 Warehousing
 Delivery
 Technology
 Manufacturing

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Amazon Supply Chain: Warehousing
A big part of Amazon’s success lies in its expert warehousing strategy, which ensures products
are easily accessible from pretty much everywhere in the world.

All the company’s warehouses are strategically placed near big metros and population hubs,
and inventory is spread amongst them to ensure supply can meet demand. There are even
mini-warehouses in smaller areas to ensure orders can be sent and delivered fast, no matter
what is being purchased.

Amazon Supply Chain: Delivery

One of the biggest differentiators between the Amazon supply chain strategy and other online
retailers’ is the plethora of delivery options offered.

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There are drones that land in your backyard or on your roof, there are Amazon-branded trucks
and delivery vans and there are even deliveries by bike in certain areas.

The retailer also leverages existing delivery routes via FedEx and UPS, too.

Amazon Supply Chain: Technology

The Amazon supply chain management approach is to embrace technology. The company
utilizes countless automation and robotic solutions, both to pick and pack orders as well as
stacking and storing inventory.

These tools not only up the company’s efficiency and delivery speeds, but they also cut down
on warehouse and staffing costs – freeing up funds for other logistics or supply chain needs.

The company has also embraced drones as well, launching Amazon Prime Air.

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Amazon Supply Chain: Manufacturing
Amazon still allows third-party sellers, but the company seems to have learned that many of
those third-party products can be made for much cheaper – and more profitably. The
retailer has taken to manufacturing its own lower-cost products, as well as white-labeling
products from other sellers.

Amazon offers branded lines in everything from household products to pets to babies, and
the list of labels just keeps growing. This allows Amazon to own the whole lifecycle of its
products – from creation to marketing to storage to shipment.

Conclusion
Though Amazon might have one of the most well-tuned supply chain strategies in the world,
the company’s never one to sit stagnant.

The retailer is preparing to start construction on its second headquarter location in the next
year or so (though the exact city has yet to be announced – reports indicate it could be Atlanta
or Raleigh), and its recent partnership with Whole Foods is set to change the food delivery
game.

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 AMAZON VALUE CHAIN MODEL
Value chain analysis is an analytical framework that assists in identifying business activities
that can create value and competitive advantage to the business.

The figure below illustrates the essence of Amazon value chain analysis.

Amazon Primary Activities

Amazon Inbound logistics
Generally, Amazon does not have long-term contracts or arrangements with its vendors to
guarantee the availability of merchandise, particular payment terms, or the extension of
credit limits. Fulfilment by Amazon (FBA) is the cornerstone of Amazon inbound logistics for
company-owned retail business. Sellers can also use FBA by stowing their inventory in
Amazon fulfilment centers.

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.

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Amazon Operations
Amazon operations are organized into three segments:

1. North America. This segment operates North America-focused websites such as

www.amazon.com, www.amazon.ca, and www.amazon.com.mx.

2. International. This segment operates internationally-focused websites such as

www.amazon.com.au, www.amazon.com.br, www.amazon.cn and others.

3. Amazon Web Services (AWS). This segment deals with global sales of computing, storage,
database, and other service offerings for start-ups, enterprises, government agencies, and
academic institutions.

Amazon Outbound logistics

Traditionally, Amazon has relied upon the services of overnight delivery businesses such as
UPS, FedEx and TNT. However, the company “recently revealed plans to lease about 20
Boeing 767 Freighters in an attempt to start its own air delivery business”

The online retail giant has also announced Amazon Prime Air (a drone delivery system) and
Amazon Flex (gig-economy based intra metro delivery service).

Generally, Amazon outbound logistics integrates the following:

 Fulfilment centers.
 Co-sourced and outsourced arrangements
 Digital delivery.
 Physical stores.

Amazon Marketing and Sales

Amazon spent more on marketing than Wal-Mart Stores, Target, Best Buy, Home Depot, and
Kroger combined. Therefore, it can be argued that marketing and sales is one of the major
sources of value in Amazon chain of operations, but this value is generated thanks to excessive
marketing investments.

Amazon marketing message conveys the promises of the largest selection of products and
services, attractive prices, fast delivery of products and overall superior customer services.
Several components of the marketing communication mix such as print and media advertising,
sales promotion, events and experiences, public relations and direct marketing are used in an
integrated way in order to communicate the marketing message to the target customer
segment.

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Amazon Service
Exceptional customer service is a major source of value creation for the e-commerce and
cloud computing company. Amazon annual report says

“We seek to be Earth’s most customer-centric company.”

And accordingly, the company offers exceptional customer services.

Amazon Support Activities

Firm infrastructure:
Amazon is one of the largest electronics retailers in the United States, make up 43% share of
online retailer market. Amazon operates in 16 countries in the world. In the last three years
from 2014 to 2016, the total revenue of Amazon increased 19.5% was $88.99 billion in 2014
to 2015 was $107.01 billion increased 20.25% and total revenue in 2016 was $135.99 billion
increased 27.8%.

Human Resource Management:

Amazon owned about 341.400 employees full-time and part-time, which was 10 times higher
than that of the year 2010 just have 33,700 employees. Through which we can see clearly that
the level of development is amazing of Amazon over the past five years.

Amazon’s procurement:
Amazon.com replenishes its distribution center inventory through a variety of suppliers.
Suppliers for their media product segment are large book distributors such as Ingram Book
Distributors, Baker and Taylor, as well as other smaller book distributors.

Technology:
Amazon.com utilizes technology innovation to differentiate itself on online customer
experience. Innovations such as personalized recommendations, one-click ordering, and
search inside the book are all Amazon.com innovations. These innovations comprise the
virtual store experience for the Amazon.com customer. Amazon uses technology to support
supplier collaboration and order sourcing, Amazon.com utilizes its core technology expertise
to improve supply chain execution. Execution involves the internal distribution center
processes that have been highlighted in this paper as well as the transportation initiatives.

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 AMAZON B2B & B2C
Amazon does business is between business-to-business (B2B) and business-to-consumer
(B2C) commerce.

Business to Business (B2B)

Amazon Business provides purchasing solutions that allow registered businesses to shop for
business supplies on Amazon.

What exactly is B2B Selling on Amazon?

It is a business seller program that targets business buyers. Through Amazon Business,
Amazon provides a platform for small and large businesses to buy from and sell to each other.
Lots of wholesalers and manufacturers sell to other business via other ecommerce platforms,
but B2B selling on Amazon is B2B ecommerce done the Amazon way.

Who is Amazon Business for?

Amazon’s B2B marketplace is for sellers who want to sell to business buyers, people who buy
for work, and managers who oversee buyers. The types of operations involved in B2B
ecommerce on Amazon include:

 Consumer retailers who have the type of inventory that can also appeal to businesses,
and the desire to expand their operations in that direction
 Existing, small B2B ecommerce sales entities
 Larger manufacturers, wholesalers and distributors looking to expand their current
B2B sales channels, whether traditional or ecommerce
 Procurement and sourcing specialists
 Government, education, healthcare and nonprofit entities

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The 2 Programs of the Amazon B2B Marketplace
Amazon offers two B2B programs that will let businesses engage with other businesses via
the Amazon B2B marketplace. One is for sellers, the other is for buyers. The buyer and seller
programs work hand in hand, allowing businesses who buy products on Amazon to connect
with businesses who sell products on Amazon.

Business to Consumer (B2C)

The business-to-consumer side of Amazon actually overlaps somewhat with the B2B side. For
instance, when Amazon helps a seller create her own page on which she can list her products,
that's serving consumers, too, although not directly. However, Amazon also offers its own
products, both new and used, which consumers can purchase directly from Amazon. Now
that Amazon has entered the digital media realm with its exclusive Kindle e-reader and
selection of e-books, Amazon serves consumers in this way, too. Through the Amazon Prime
service, Amazon provides consumers with discounted instant video and e-books as well as
free shipping specials for a monthly fee.

Marketplace
Amazon’s marketplace gives customers the option to purchase items directly from Amazon
or from third-party sellers. For items purchased directly from Amazon, Amazon is the seller of
record, owns the items, and fulfills all orders.

The Amazon Marketplace eliminates the need to visit multiple stores or websites for
competitive bids. One search in the Amazon Marketplace provides access to a multitude of
sellers competing for your business, reducing cost and procurement complexity. Amazon
provides advertising and payment processing for third-party sellers. As part of this, third-party
sellers can highlight their selling credentials as part of their listing on the marketplace detail
page. Amazon Business provides buyers with access to millions of additional business-only
products. Some sellers on the marketplace restrict access to certain products because of
competitive, regulatory or other concerns. Amazon Business gives those sellers the
confidence that such products will only be sold to qualified businesses. Amazon’s marketplace
provides one-stop shopping across a vast selection for business buyers. The Amazon
Marketplace helps businesses reduce procurement costs, enables transparency across
multiple sellers, and gives businesses access to greater selection and dynamic marketplace
pricing

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Comparison
Amazon's B2B and B2C services do not include auction-style sales like its competitor, eBay.
Rather, all prices are fixed prices. Amazon still remains the e-commerce giant that not only
sells its own wares but also enables third-party vendors to sell their products, too. From
Amazon, businesses receive help with order fulfillment, transaction processing, cloud data
storage service, advertising and more.

E-PROCUREMENT
Amazon Business, a B2B procurement platform that launched in 2015, reached its millionth-
customer mark in July, 2017.

By making it easier for businesses to purchase products from one another, Amazon Business
hopes to correct some of the current inefficiencies within the B2B procurement space. Before
a business makes a purchase, there are many assessments, checklists and approvals that must
be finalized. Even then, the work isn’t over; once a supplier is chosen, negotiations take place.
This process can often be long and tedious, forestalling the contract’s completion and order
fulfillment.

Procurements Services by Amazon

Amazon Business currently offers a suite of procurement services to every type of business
and organization. They also offer business-only price savings, fast and easy shipping, multiuser
accounts, flexible payment options and a breadth of product options. Newer features include
paying by invoice, catalogue curation

E-INVOICING
Pay by Invoice is a new payment method available for Amazon Business customers. It lets
qualified businesses purchase on payment terms. When an order ships, you are sent an
itemized invoice. Payment is due to Amazon, per the agreed terms as reflected in the invoice.
Customers will be able to view invoices from the Your Orders page, and the Your Invoices
page. You can track invoice status and due dates within the Your Invoices page or with order
history reports. You can pay for invoices via Automated Clearing House (ACH), wire transfer,
or check.

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 AMAZON PAYMENT METHODS
Amazon Pay accepts credit and debit cards and transfers from your available Amazon Pay
account balance. Credit cards currently accepted include Visa, MasterCard, Discover,
American Express, Diners Club, and JCB. An Amazon.com store card is available for use with
selected merchants.

Safe Online Shopping

Security is a priority at Amazon.in and we make every effort to ensure that our transaction
process is safe and that your personal information is secure.

Do Not Share Personal Information

Amazon.in will never e-mail or call you to ask you to disclose or verify your Amazon.in
password, credit card or bank-account number, or any other personal information. If you are
contacted or receive an unsolicited e-mail which asks you any of this information, disregard
the request and report the incident to Amazon.in for investigation.

Identify False (Spoof or Phishing) E-mails

 If you receive an e-mail asking you for personal information or directing you to a site
other than Amazon.in, or asking you to pay outside of Amazon Marketplace, it could
be a "spoof" or "phishing" e-mail and should be considered as fraudulent.

 Genuine Amazon e-mails come from an e-mail address ending in "@Amazon.in" or

"@amazon.com". If you receive an e-mail in a different format i.e. amazon-
security@hotmail.com, you can be sure that it's fraudulent.

 Some phishing e-mails contain links to websites that contain the word "amazon"
somewhere in the URL but will take you to a completely different website. If you hover
over the link you often can see the underlying URL which will be in a different format
to those linked to within the Amazon sites.

 If you click though on a phishing e-mail and are taken to a page looking like "Your
Account" or anything that asks you to verify or change your personal details, you
should consider it as fraudulent.

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 CUSTOMER INTERFACE
Amazon has one of the most efficient user interfaces creating a superb user experience. It is
leading by examples for designers of e-commerce sites to follow considering the amount of
traffic it generate

Context
The purposes to visit the website are either for online purchase or product search. The
Homepage, although seemingly cluttered with a lot of information, has a distinctive section
and a prominent navigation section on the top left corner of the page.

Customization
One great feature of customized content is featuring of the related items to the items already
bought. It displays item that you already looked at and items related to it. This can incentivize
the customer to purchase more. Again, great customer experience designing.

Communication
Selling on Amazon requires less communication from you to buyers than most other online
sales channels, because much of the process communication is handled by Amazon.

Amazon sends all order and shipping-related communications to customers. To avoid

conflicting messages or confusion, do not send order or shipping-related communications to
customers.

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Content

Amazon can study the buying pattern of the user and assists him in his purchase and
customizes his homepage according to his previous interactions by the way of including
additions to his wish-list, page views, previous searches, reviews about the product among
other things. Making good use of data is imperative to designing great customized user
experiences.

Community
Amazon does provide a community for user to user communication where they can interact
and ask questions regarding their purchase from Amazon.

Connection
Amazon has only formally linked with those websites whose content complements Amazon’s
own content and making it easy for customers to find appropriate information through
hyperlink, hypertext jump etc.

Commerce
Amazon enables commercial transactions and provides secure checkout that asks only for
necessary information, protects customer privacy, reveals shipping costs upfront, allows
order tracking, and supplies customer service and order confirmation data.

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 ISSUES OF AMAZON
Leadership:
Jeff Bezos is 54 years old. In terms of long-term plans, if Jeff Bezos steps down, a change in
leadership could cause detriment to Amazon corporate structure and mentality. It may lead
to disastrous moves and mistakes and could completely turn Amazon into a drastic decline.
One example is General Electric, as even though the decline could partly be due to Jack
Welch’s cover-up of crucial flaws in the company, following the transition to Jeff Inmelt, with
poor decisions time and time again, GE went on a freefall and tethered on bankruptcy before
being saved by the US government.

Customer experience:
While focus on customer experience to find more and more opportunities is a strength,
Amazon seems too focused on the economic aspects of this, and overlooking the need to just
please their customers more.

Legal Issues
With robot workforce laws being put into place, Amazon could face issues regarding
manpower costs and this could spell trouble for the company

Publishers may cut off their dealings with Amazon, which could spell trouble for them and
putting them at risk of not being able to offer consumers a wide range of variety of products.

Disruptive Innovation and Competition

It has been long known that Amazon is the dominant player in the Cloud computing platform.

However, recently, Alibaba launched its cloud computing platform, which may vastly outpace
Amazon. Alibaba has already reached 2.2 billion in revenue.With Amazon’s notoriously poor
grip of the Chinese market, Alibaba could swoop in and steal market share in the rapidly
growing Chinese market and may invade into American markets.

Data loss and security breaches

Perhaps the biggest risk facing Amazon is hackers. No company can completely guarantee
that its security won't be breached. That's a large concern at a company that could have its
store knocked offline or the hundreds of millions of credit cards it holds information on
compromised.

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Shipping costs problem
Amazon has so far done a spectacular job in optimizing its shipping operation. That's a key to
the company's success as its ability to control shipping costs remains key to its success.

Amazon acknowledged that the limited number of shipping companies it works with could
cause an increase in shipping costs.

Wal-Mart
Aggressive competition is an issue against Amazon. Large retail firms, such as Wal-Mart, are
continuing their efforts in improving their online retail presence.

And Wal-Mart isn’t just any retailer. It is the biggest retailer in the world. And it got there by
competing on pricing.

Imitation of business model:

Amazon.com Inc. faces the issue of imitation, considering that its business model is easily
imitable. The materialization of this threat could reduce the company’s market share.

Counterfeit items:
One of the issues facing Amazon.com Inc.’s e-commerce website is the continuing sale of
counterfeit items, which are generally against customer expectations.

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 RECOMMENDATIONS
Geographic expansion
Amazon has limited presence in developing markets. It is recommended that the company
must increase its strategic entry into developing countries, which present major growth
opportunities based on rapid economic development.

Healthcare
Amazon appears poised to enter healthcare, perhaps beginning with a bold move into
pharmacy services. With healthcare inflation unchecked, pharmacy is an industry it could
disrupt quickly. It has also joined forces with Cardinal Health and other distributors in an
effort to extend reach in medical devices to hospitals and others.

Security:
Another recommendation is for Amazon to address counterfeiting and cybercrime through
intensified information technology measures for organizational and consumer security and
protection.

Be nicer to its employees.

Back in 2015, The New York Times famously slammed Amazon’s “bruising” culture. While
there’s some evidence things have improved since then, there’s still room for improvement.
And there are still disturbing stories about the company’s highly competitive, high-stress
working environment. I’m not saying Amazon should abandon the aggressive practices that
have helped it lead in many tech categories, but a little compassion can go a long way in
attracting the very best workers.

To address the issue of competition against large retail firms:

Amazon.com Inc. needs to strengthen its marketing efforts and competitiveness to compete
against large retail firms like Wal-Mart.

Counterfeiting items:
The company should improve its technological measures and organizational policies to
address counterfeit sales. For example, an automated process for consumer reports and
product evaluation could help reduce the amount of counterfeit products sold on the
website.

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Physical stores:
Open physical sites where customers can physically get the “Amazon experience”. Tying
these centers to existing distribution and delivery centers will make them much more cost-
effective than building unique brick and mortar buildings. Have stations where people with
limited access can come and order from Amazon.com and pick up themselves at these
centers.

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 CONCLUSION
Amazon (Amazon.com) is the world’s largest online retailer. The company was originally a
book seller but has expanded to sell a wide variety of consumer goods and digital media as
well as its own electronic devices, such as the Kindle e-book reader, Kindle Fire tablet and Fire
TV, a streaming media adapter.

Amazon is the titan of e-commerce, logistics, payments, hardware, data storage, and media.
It dabbles in plenty more industries. Amazon’s history and growth to dominance of the e-
commerce marketplace has positioned it well for the future but its continued success is not
guaranteed and it faces and may face many challenges. And to continue to meet those
challenges we have recommended few areas where Amazon could still work to improve its
place in the market like expanding its geographical existence, intensifying security and
protection on their website, addressing their counterfeiting sales, etc.

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