Retailing Mix

SUBMITTED BY-
ARYAN RATHORE
Bft/18/519
The mission and vision of Amazon.com is:

Our vision is 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.

Amazon was founded by Jeffrey P Bezos

in 1994 who has since been serving as its
chairman. However, the online business
of Amazon opened in 1995. The company
has come a long way from being an
online book seller to being the leading
online retailer of the world. Amazon's
slogan is “Work Hard. Have Fun. Make
History.”Today, it sells hundreds of
millions of products,.Its retail division
include everything from apparels to auto
parts, toys to electronic gadgets, home
décor to health/beauty utilities.
several of which are its own and others
sold by third party sellers through its
website.
Products/Services:
Amazon Marketplace (e-commerce): Amazon is
a major online selling platform for third party
sellers including small and medium sized
businesses (SMBs) who can sell their products to
a global audience. The company allows sellers
from around the world to sell their products on
Amazon platform.

Amazon earns fixed fees from them which can

be a percentage of sales, per-unit activity fees,
interest or a combination of these from its
seller programs. More than 300,000 US based
SMBs started selling on Amazon e-commerce
platform in 2017. Millions of SMBs from
around the world also now sell on Amazon.
Apart from every State in US , SMBs from 130
different countries are selling at Amazon
market place.
Kindle Publishing: Kindle Direct publishing
allows independent authors and publishers to
make their products available on Kindle
store. They can choose a 70% royalty option.
Amazon also has its own publishing arm
called Amazon publishing. The company
offers more programs that allow authors,
musicians, filmmakers, app developers, and
others to publish content and sell it online.
You can get a book published in Amazon's
Kindle store less than 24 hours after
submitting it through Kindle Direct Publishing.

AWS : Amazon web serves developers and

enterprises of various sizes through AWS. AWS
offers a wide range of global compute, storage,
database, and other service offerings. Net Sales
from AWS jumped to 17.5 Billion dollars in 2017 and
counting. Amazon has also grown the pace of
innovation across its AWS platform in areas like
machine learning and artificial intelligence,
Internet of Things, and serverless computing.
Release of Amazon Sagemaker has grown the
adoption rate of Amazon AWS in the recent years.
Alexa: Alexa’s popularity is at it’s
peak.Customer adoption rate of Alexa enabled
devices which are  among the best selling items
on Amazon has sharply grown. Customers can
control more than 4000 smart home devices from
1200 brands with Alexa.  Alexa has seen several
major improvements in the recent years
including fingerprinting, far field speech
recognition, spoken language recognition
through improvements in machine learning
components as well as use of semi supervised
learning techniques.  
Amazon Devices: Amazon devices including Echo
devices, and Echo Dot and Fire TV Stick with Alexa
have seen their popularity and adoption rate grow
fast. Customers bought nearly twice as many Fire TV
Sticks and Kids Edition Fire Tablets in 2017 holiday
season as compared to 2016. Apart from these in 2017,
Amazon released an all new echo, echo spot, echo
plus as well as next generation fire TV and the Fire
HD 10 tablet. Amazon also celebrated the tenth
anniversary of Kindle by releasing the all new
waterproof Kindle Oasis in 2017. 
Amazon music: Amazon music is
growing fast with tens of millions of
paid customers. In 2017, Amazon
expanded its Amazon music unlimited
(on-demand, ad-free offering) to more
than 30 new countries.

Fashion: Amazon has also become an important

destination for fashion shoppers. The company
launched Prime Wardrobe which allows members to
try latest styles before buying. Amazon also
introduced Nike and UCG as well as several new
private brands and celebrity collection by Drew
Barrymore and Dwyane Wade. 

Whole foods: Amazon acquired

Whole Foods market on August 28 of
2017. Its acquisition of whole foods
was a major step towards growing
its range of food and grocery
products. Since then, the company has
extended several of the prime
benefits to Whole Foods segment as
well.
 Amazon Prime is the heart of Amazon
Prime: 13 years later than its launch, the number of paid
Amazon prime members grew past 100 millions in 2019. The
company shipped more than 5 billion items with Prime
Worldwide . Amazon has improved the scope of Prime a lot
since its launch. It has expanded Prime to Mexico,
Singapore, the Netherlands, and Luxembourg and also
launched Business Prime shipping in US and Germany.
Prime shipping has grown faster and Prime Free Same-Day
and Prime Free One-Day delivery is now available across Amazon Prime day’19
more than 8,000 cities and town. Across more than 50 cities in
nine countries, customers enjoy the benefits of Prime Now.

Prime Video: Prime Video continues to remain

the driver of Prime memberships worldwide. In
2016 and 17, the company added several new
Prime Originals. It has already released many
and there are several more in the Prime Original
series Pipeline. Prime Video Direct secured
subscription video rights for more than 3,000
feature films. It also committed above $18 million
in royalties to independent moviemakers and
other rights holders.
https://services.amazon.com/se
rvices/soa-approval-category.ht  Approved  Product category
ml for sellers

https://www.amazon.com/b?i Shop Featured Categories

e=UTF8&node=17602470011

 If you live in a city, there's a

good chance you can use Amazon
Locker to get your packages
dropped o at secure location
while you're at work.

 (AGS) Amazon Game Studios

is a division of the online retailing
company Amazon that focuses on the
development of video games.Recently
The Grand Tour game which is an
episodic racing video game developed
and published by Amazon Game
Studios for the PlayStation 4 and Xbox
One was launched on 15 January 2019.
  Amazon also wants to help you
unclog your toilet and mow your
lawn. Home Services makes it easy
to book pre-vetted professionals
whenever you need them.

 Looking for replacement car parts?

Amazon Garage lets you store your
car's make and model to make it easy
to find accessories that will actually
work with your vehicle.

 If you're a teacher,
you can check out the
newly-launched Amazon
Inspire for a bunch of
educational resources.
Amazon is a moonshot factory
The company is currently running a beta test
of Amazon Go, a store that uses cameras
and sensors throughout the store to
automatically track what a customer has
picked out, and automatically charges them
as they leave. 
Amazon is also working on reducing the friction between ordering
a product and having it show up on your doorstep. It’s
bought robotics companies to help automate its workflow and runs
competitions aiming to make robots better at sorting items for
shipping. It’s also developing autonomous drones to fly smaller
items to Prime customers in under 30 minutes.
Amazon has a total of 562,382,292
FACTS & FIGURES
products as on Jan 10th, 2018
The category Clothing, Shoes, and
Jewelry have the highest number of
products -166.28M products! Amazon’s
apparel business has been booming the
past year. It’s predicted that Amazon
will soon end up with net apparel sales
of 62 billion in 2021.
Over the years, Amazon has
expanded its product portfolio from
books to absolutely everything and
its no surprise that almost half the
products sold on Amazon are
Books (44.2M).
Electronics is the second largest
category in Amazon with 10.1M
products listed. This is followed
by Home & Kitchen (6.6M) and Digital
Music (6M).
Amazon Alexa now has 93K Skills,
a 210% increase since Jan 2018
 PRICING : AMAZON
Pricing is very competitive on Amazon. It’s
algorithm is very complex and cutting the
margins through price reductions doesn’t always
improve the position of sellers on Amazon. That
is why it is paramount to understand the various
differences in pricing and the various pricing
strategies. This affect the chances of winning the
Buy Box.

There are two types of prices on Amazon, that

any seller must be familiar with:

Item price - This is the cost of a product only. This
is the price customers will see minus shipping
costs and any other factors that may affect the
total price.
Total price or landed price: It is the price with everything
included - this is what the customer, should they buy, pays.
The following are included in the total price:

Shipping and handling charges;

Discounts, rebates, or special sales/promotions you
offer/make with respect to purchases;
Shipping method;
Business practices, such as any reduction or elimination of
shipping charges on an order, or of any other order-
related fees and expenses;
Low-price guarantees.
Amazon Repricing

Many sellers choose to undercut their competition,

usually by $00.01 or £00.01 in order to earn a better
place in the marketplace. Undercutting the competitors
is called ‘repricing’ and it can be done via:

Manual Repricing: As a seller, one can choose to

reprice the product. This involves changing the price
manually through Amazon Seller Central – or via other
sites should you be managing your products this way.

This will only work for sellers with a few products, as it

is time consuming, but gives you a clearer
understanding of both you and your competitor’s
products and pricing.
 Another way Amazon has a stronghold over pricing is by
having majority stake in retailers which are selling online.
These online retailers generally sell most common stuffs which
sell very fast, they do this because they buy these most selling
products in huge bulk from manufacturers which give them a
further room for negotiation in pricing.

 Amazon also provides value added services like Prime where

users pay subscription charges for one-day delivery and early
access to the deals. Amazon also follows differential pricing, for
the same product it charges different price depending in the
place of consumer as it is having different websites in each
country it operates. 

 Amazon sparingly include penetration pricing, price skimming,

psychological pricing, product line pricing, promotional pricing.
The e-commerce giant earns fixed fees, a percentage of sales,
per-unit activity fees, interest, or some combination of these
according to its seller programs.
 Other pricing strategies:-Taking a categorical perspective - Amazon
applies different pricing strategies across different categories. While
products might be more expensive in one category, they’ll be more
competitive in another ex:- prices are most competitive for goods
such as electronics, clothing etc while it is least competitive in areas
like automotive parts and other household items

 Other different way in which Amazon has command over its pricing
in some areas are by that they have sales and pricing data on every
third-party seller. That means that Amazon can easily identify
profitable products with high sales velocities to begin sourcing and
selling themselves. As they now manufacture those products
themselves the overall cost goes even further low giving them an
upper hand. Such products are smart speakers, computer peripherals
and somewhat in food sector as well.
 Profit: Amazon
 Fixed Price – a fixed monthly subscription paid by
the registered sellers to host their products on the
platform (i.e. website) of the e-commerce company. In
some cases the company also charges a fixed closing
fee like 10 for every sale.

 Commission – Depending on product category, the

company charges the registered seller a certain
percentage commission on the value of the product
sold. This commission could range between 5% – 20%.
 Handling logistics to increase the profits
further :-The biggest advantage of getting
into logistics for e-commerce players is not
the back end integration as it may appear.
In fact, logistics is a big source of
additional revenue for these companies.
They earn shipping / delivery charges
directly from the customers as well as from
the registered seller (for picking up and
delivering the goods from the registered
seller to the customer).

 Products have high costs, so margins

Amazon makes on them are thin.

 Amazon’s business model derives its

profits from Amazon Advertising, Amazon
Prime, Amazon AWS which run with higher
margins.
 Physical Evidence
 Amazon’s biggest physical presence is its
website. As it is an online retailer the
place of service is its website and apps
which very user-friendly and built with
great design. Amazon’s warehouses and
fulfilment centres present in all countries
of its operations are the largest one can
ever find. It has logo which is very well
resembling what Amazon stands for, i.e.
an arrow from a to z which implies one
can buy anything on Amazon. Its
packages also sport this logo. Amazon
releases its financial reports also for its
investors and users yearly providing
information about where company
stands and where it aspires to go.
Amazon Go is a chain of convenience
stores in the United States operated by
the online retailer Amazon, with 18 open
and announced store locations
in Seattle, Chicago, San
Francisco and New York City as of 2019.
The stores are partly automated, with
customers able to purchase products
without being checked out by a cashier
by using a self-checkout station.
Amazon Go stores were conceptualized
and tested by a team of Amazon
executives, who constructed a 15,000-
square-foot mock supermarket in a
rented warehouse in Seattle, before
revealing the work to Amazon
founder Jeff Bezos in 2015.The first store,
located in the company's Day 1 building,
opened to employees on December 5,
2016, and to the public on January 22, 2018.
The flagship store has prepared
foods, meal kits, limited groceries, and
liquor available for purchase.
 Amazon gives a great importance to its workforce.
Irrespective of what level and domain of the organization
they are working people get benefits from Amazon which
makes it a desirable employer. These benefits include
health, financial, assistance programs, some time off like
vacations and equity plans. There are nearly 2,30,800
employees working across the globe round the clock to
ensure best customer experience and as Amazon is the
most visited website in retail space (1.27 billion/year) it
offers its employees a great deal of training and
development activities.

 Amazon employs a multi-level e-commerce strategy.

Amazon started by focusing on business-to-consumer
relationships between itself and its customers and
business-to-business relationships between itself and its
suppliers and then moved to facilitate customer-to-
customer with the Amazon marketplace which acts as an
intermediary to facilitate transactions.

 The company lets anyone sell nearly anything using its

platform. Some large e-commerce sellers use Amazon to
sell their products in addition to selling them through their
own websites.
 People:
Amazon gives a great importance
to its workforce. Irrespective of
what level and domain of the
organization they are working
people get benefits from Amazon
which makes it a desirable
employer. These benefits include
health, financial, assistance
programs, some time off like
vacations and equity plans. There
are nearly 2,30,800 employees
working across the globe round the
clock to ensure best customer
experience and as Amazon is the
most visited website in retail space
(1.27 billion/year) it offers its
employees a great deal of training
and development activities.
 Without any brick-and-mortar locations Amazon
attract customers and develop relationships,
Amazon has had to build its reputation through
the effectiveness of its online customer
experience and service. The company brought
trust and transparency to a shopping
experience that was previously considered
unreliable, paved the way for an e-commerce
boom, and set a standard for customer
satisfaction that other brands now abide by. 

Ways Amazon Has Changed Customer Service in 20 Years

The Proliferation of Customer Reviews

Amazon was among the first to display customer
reviews and add transparency to the e-retail space. In a
world before online reviews, consumers took a risk in
making an online purchase, essentially clicking in the
dark, not knowing what to expect when a product
arrived. Thanks to the open marketplace that Amazon
has built, consumers can gauge how satisfied they'll be
with a product based on the experiences of fellow
shoppers. 
A Real-Time Recommendation Engine 
Amazon has become the king of cross-selling.
Though it seems standard in e-retail now, the real-
time product recommendation engine was
"pioneered largely by Amazon as a means to expose
consumers to its vast marketplace," Chip Bell,
author and customer service expert, says.
Developing personalized recommendations for
consumers based on their purchases and browsing
behaviors has proven to be an effective strategy for
Amazon.

Streamlined Checkout

Amazon was able to achieve with Prime, a

program made up of member-only service,
was strike a unique balance between
exclusivity and attainability that feels
democratic to consumers
A Network Economy
Amazon has shown that the "art of the
possible can be delivered.One of the
company's biggest strengths, he says, is that it
has been able to build a functioning network
economy. "By putting together the content
(goods), the network (distribution), and arms
(technology), they’ve built an vertically
integrated model that gives them digital scale
in customer service
Strategic Shipping Support
"The fundamental shipping advantage
Amazon offers to customers is reliability."It's
not about two day, or same day, but about
knowing when the package will be at your
door." 
Deep Brand-Customer Relationships
Amazon is always ready to "go to bat for the
consumer," Bell says. The company stands
behind the vendors that sell products on its
site, but if something is wrong with the
delivery process or the product itself, Amazon
will take its customer's side and fight for a
desirable outcome.
 Promotion
Amazon is a highly popular brand and hardly needs any
introduction in today’s world. Its popularity has grown very
fast in the recent years with Amazon Prime and other new
features. The popularity of Amazon web Services has also
grown a lot leading to high volume sales and profits.

The main channel of marketing and promotions for

Amazon is the marketplace or Amazon website.

Customers can easily find and choose from millions of

products available on its website.

Amazon also employs her digital channels for

promotions including online advertising and affiliate
marketing.

 Its marketing expenses grew past 10 billion dollars in

2017 from 7.2 Billion dollars in 2016. There was total 39%
growth in its marketing expenses from 2016 to 2017.
Amazon uses aggressive marketing campaigns to promote its
brand. When it comes to promotion Amazon leaves no stone
unturned in its marketing mix promotional strategy.

Its major focus is on advertising – through print ads in

newspapers have increased exponentially of late.

Amazon uses creative television commercials and social media

marketing through SEO and targeting customers through their
browsing patterns.

Amazon also have affiliate programs where website and blog

owners advertise Amazon product links in their platforms.
• Next important thing is sales promotion – Amazon has mastered
this art and give effective sales promotions and discounts during
holiday seasons and festivals resulting in high visits to the
website like in India they conduct THE GREAT INDIAN FESTIVAL.

• Public relations exercises to improve brand image like launching

Amazon Smile which donates to charity organizations.

• ‘Gift a Smile’ in India is an initiative where people can send their

gifts directly through Amazon to NGO’s that are partnered with
the company.

• Direct marketing to companies for providing its web services is

also performed by Amazon.
 Place
Amazon is a global brand and has its presence all across the
world.All the consumers buy products and services from the
website and Apps of Amazon.com to buy.

These are huge warehouses constructed by Amazon in strategic

locations to reach even the remotest of places.

These are categorized into sortable fulfilment centres (large and

small goods), non-sortable, customer return and speciality items
warehouses.From these fulfilment centres the goods are
transferred to distribution centres and then to customers.

Amazon uses the local postal and courier

services for the transportation of packages.
(UPS, USPS and FedEx in North America and
India Post in India).
Nowadays with newer algorithm and technology allows the
company to consistently deliver faster and offer cheaper
prices to customers as they don’t don’t depend on any third
party services to deliver their products.

The Amazon backend routes the order to the nearest

fulfillment center, where a picker finds it.

 The product is packed and then placed in a waiting delivery

truck, depending on the shipping option.

The entire process may only take minutes from when the
customer gives a final order confirmation before it is placed
in the delivery truck.
Amazon has more than 175 fulfilment centers across the globe.
These warehouses occupy more than 150
million square feet space where the
Amazon associates can pick, pack and ship
millions of orders. In North America, it has
more than 75 fulfilment centres and more
than 110 operational facilities. 
The e-retail giant also operates 465 whole
foods market stores in North America and
7 internationally. Acquisition of Whole
Foods market has helped it grow its
physical footprint nationwide in U.S.
North America alone has more than 125,000
associates working inside Amazon fulfilment
centres .  India has also become a major
market for Amazon and Amazon.in, the
Indian website of Amazon market pace has
become the fastest growing marketplace in
the country.
Amazon SWOT Analysis
Strengths :
1. Amazon is an early market entrant with brand
equity
2. Integrated services like online ticket tracking, online
money transfers etc give Amazon a huge edge
3. Vast customer base due to international presence
4. Amazon provides customized user shopping
experience.
5. The company has over 500,000 employees in over 20
countries
6. Strong brand image of Amazon owing to excellent
marketing and branding activities
7. Advertising through online, TVCs, print ads etc have
increased brand presence of Amazon
8. It is one of the largest tech retailers in the world
9. Amazon Prime is one of the fastest growing online
content providers giving music, movies & entertainment
weaknesses
1. Intense competition means limited
market share growth for Amazon
2. Heavy investments in advertising
and discounting affecting margins  Opportunities
1. The markets devoid of internet and
increasing internet can boost Amazon's
presence
2. Customers reluctant in shopping
online can be persuaded
3. Partnerships with corporate houses
for bulk selling can help boost sale of
Amazon
4. Acquisition of smaller business can
Threats help boost the business worldwide
1. Amazon can be subjected to online
frauds
2. Risk of brand dilution by selling a
very wide range of products
3. Newly emerging competitive online
shopping portals can be challenging
4. Strict government policies and
taxation can affect margins