A PROJECT ON

―A STUDY ON CONSUMER SATISFACTION OF AMAZON‖

Submitted to

University of Mumbai for partial completion of the degree Bachelor of Management

Studies
Semester VI (2021-2022)
Under the Faculty of Commerce
By
PRAYAG GOPAL NANGARE
Roll no: 534
Under the Guidance of
PROFESSOR : - VIJAYALAXMI K

Uttari Bharat Sabha‘s

RAMANAND ARYA D.A.V. COLLEGE
(Autonomous)
STATION ROAD, BHANDUP EAST, MUMBAI- 400042
MARCH (2021-2022)

1
 CERTIFICATE

This is to certify that PRAYAG GOPAL NANGARE Roll No 534 ,has worked and duly

completed his project work for the degree of Bachelor of Management Studies under

the faculty of commerce in the subject of Human Resource Management and his project

is entitled, ―A STUDY ON CONSUMER SATISFACTION OF AMAZON ‖ under my

supervision.

I further certify that the entire work has been done by the learner under my guidance and

that no part of it has been submitted previously for any degree of diploma of any

University.

It is his own work and facts reported by his personal findings and investigation.

Date: __________

Mrs. Chandrakala Srivastava Dr. Ajay Bhamare

Course Coordinator Principal

Seal of college

Prof. Vijayalaxmi K
Project Guide/ Internal Examiner External Examiner

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 DECLARATION BY LEARNER

I the undersigned PRAYAG GOPAL NANGARE here by, declare that the work embodied
in this project work titled ―STUDY ON CONSUMER SATISFACTION OF AMAZON‖,
forms my own contribution to the research work carried out under the guidance of
Professor Vijayalaxmi K is a result of my own research work and as not been previously
submitted to any other University for any other Degree/ Diploma to this or any other
University.
Wherever reference has been made to previous work of others, it has been clearly

indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and

presented in accordance with academics‘ rules and ethical conduct.

Your name
PRAYAG NANGARE

Certified by
Vijayalaxmi K

3
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is

so enormous.

I would like to acknowledge the following as being idealistic channels and fresh

dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this

project.

I would like to thank my Principal, Dr. Ajay Bhamre for providing the necessary facilities

required for completion of this project.

I take this opportunity to thank our Coordinator Mrs. Chandrakala Shrivastava for her

moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Vijayalaxmi K

whose guidance and care made the project successful.

I would like to thank College Library, for having provided various reference books and

magazines related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me

in the completion of the project especially my parents and peers who supported me

throughout my project.

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 INDEX

Sr Chapter Name Page Number

No.

1 EXECUTIVE SUMMARY 6

2 INTROUCTION 7-12

3 HISTORY 13-14

4 PRODUCT AND SERVICE AND 15-18

STATEMENT OF AMAZON

5 19-21
AMAZON CUSTOMER VALUE
PROPOSITIONS

6 22-32
BUSINESS STRATEGY OF AMAZON

7 33-44
THE BUSINESS MODEL OF AMAZON

8 43-53
MARKETING MIX

9 54-59
SUPPLY CHAIN

10 ARTICLES 60-66

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11 THE ETHICAL ISSUE WITH AMAZON 67-73

12 74-97
DATA INTERPRETATION

13 CONCLUSION 98

14 99
BIBILOGRAPHY

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 Chapter 1
EXECUTIVE SUMMARY

Amazon.com is a customer centric company. They put more effort in

improving their system to make the experience of customer more
comfortable so that he keeps on returning to the website. Jeffery Bezos
who is the founder of the Amazon.com started this company after seeing
the use of internet increasing rapidly.

The company was started in year 1994. Bezos started operating the
business from a small office in Seattle and the website was launched on
internet in 1995. The main focus of Bezos was to change the experience
of buying a book from the internet with more enjoyable service. This
concept proved to be so successful that it became the most successful
online business.

Amazon.com till date has gone through many ups and downs. It has
been registered as the largest customer base with yearly sales of billions
of dollars. Now Amazon.com offers very wide variety of products.
Anyone can buy any products of almost any brand. Their company went
through a tough time in between when they were trying to compete with
competitors like Wal-Mart and eBay. But they were able to come out of it
but improving their services according to customer experiences. They
improved on their strengths and worked on weaknesses so as to make
the customers experience more enjoyable and interesting.

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I

INTRODUCTION

Amazon.com is an American multinational company

based in Seattle, with 750,000 employees. It focuses on e-commerce,

cloud

computing, digital streaming, and artificial intelligence. It is considered

one of the big for tech company, along with Google, Apple, and
Microsoft. It's been referred to as

"one of the most influential economic and cultural forces in the world.

Amazon is known for its disruption of well-established industries through

technological innovation and mass scale. It is the world's largest online

market

place, AI assistant provider, and cloud computing platform as measured

by revenue and market capitalization. Amazon is the largest Internet

company

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revenue by in the world.[18] It is the second largest private employer in
the United States and one of the world's most valuable companies.

Amazon was founded by Jeff Bezos in Bellevue, Washington, in July

1994. 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. In 2017, Amazon acquired whole foods market

for US$13.4 billion, which vastly increased Amazon's presence as a

brick-and-mortar retailer. In 2018, Bezos announced that its two-day
delivery service, Amazon Prime, had surpassed 100 million subscribers
worldwide.

Amazon distributes downloads and streaming of video, music,

and audiobooks 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 acquisitions
include Ring, Twitch, Whole Foods Market, and IMDb. Among various
controversies, the company has been criticized for technological
surveillance overreach,] a hyper-competitive and demanding work
culture, tax avoidance, and anti-competitive practices.

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 E-COMMERCE

E-commerce (electronic commerce) is the activity

of electronically buying or selling of products on online services or over
the Internet. Electronic commerce draws on technologies such as mobile
commerce, electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data
collection systems. E-commerce is in turn driven by the technological
advances of the semiconductor industry, and is the largest sector of
the electronics industry.

Modern electronic commerce typically uses the World Wide Web for at
least one part of the transaction's life cycle although it may also use
other technologies such as e-mail. Typical e-commerce transactions
include the purchase of online books (such as Amazon) and music
purchases (music download in the form of digital distribution such
as iTunes Store), and to a less extent, customized/personalized
online liquor store inventory services.[1] There are three areas of e-
commerce: online retailing, electronic markets, and online auctions. E-
commerce is supported by electronic business.[2]

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WHAT IS AMAZON E-COMMERCE:

Small sellers of used and new goods go to Amazon

Marketplace, Amazon zShops or Amazon Auctions. At Marketplace,
sellers offer goods at a fixed price, and at Auctions they sell their stuff to
the highest bidder. Amazon zShops features only used goods at fixed
prices. If an item listed on zShops, Marketplace or Auctions is also sold
on the main Amazon.com, it appears in a box beside the Amazon.com
item so buyers can see if someone else is selling the product for less in
one of the other sales channels.

Another sales channel called Amazon Advantage is a place where

people can sell new books, music and movies directly from the Amazon
warehouse instead of from their home or store. Sellers ship a number of
units to Amazon, and Amazon handles the entire sales transaction from
start to finish. In all of these programs, Amazon gets a cut of each sale
(usually about 10 percent to 15 percent) and sometimes charges
additional listing or subscription fees; in the case of Amazon Advantage,
the company takes a 55 percent commission on each sale. The
Advantage channel is something like a consignment setup, a sales
avenue for people who create their own music CDs or have self-
published a book and are simply looking for a way to get it out there.

One of the latest additions to Amazon's repertoire is a subsidiary

company called Amazon Services. Through Amazon Services, Amazon
sells its sales platform, providing complete Amazon e-commerce
packages to companies looking to establish or revamp their e-commerce
business. Amazon sets up complete Web sites and technology
backbones for other e-commerce companies using Amazon software
and technology. Target, for instance, in addition to having a store on
Amazon.com, also uses Amazon Services to build and manage its own
e-commerce site, Target.com.

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Amazon In India:

Amazon India was launched in June 2013. Since foreign e-commerce

companies were not allowed to hold their own inventory and sell directly
to consumers in India, Amazon launched its marketplace model which
enabled third-party sellers to trade their products. Since its launch in
India Amazon has built a biggest online marketplace in the country.

Challenges faced by Amazon In India:

1. To understand e-commerce market to the developing country

2. Study and Understand the issues of running e-commerce
website in India.
3. To analyze how to win over India‘s Key emerging markets.

First Choice:

As per a recent survey was done among more than 2000 online
consumers Amazon is the first choice for online shopping in India as
compared to its competitor Flipkart and Snapdeal. The main reason
behind it is their prime service and strong logistics. According to the
survey, 80% of Indian online consumers prefer Amazon over any other
e-commerce website.Shipping cost, shipping time, product review-
ratings, low price guarantee and retailer‘s return policy are the key
factors for customers while picking an online retailer. From last many
years, Amazon has been rated very high at customer satisfaction and
consistently increasing the categories of products to purchase which is
helping Amazon to remain people‘s favorite.

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Amazon Journey in India:

After its start in India in 2013 Amazon has come a long way and
continue to become the first choice of the consumers. Here are the few
Highlights of Amazon journey in India.

 Since the launch in India Amazon has Invested 5 Billion US

dollars in India.
 Amazon is covering every serviceable pin codes in India for
delivery of their products.
 Amazon has largest storage capacity in India with 41
fulfillmentcenters across 13 states.
 There are more than 20,000 Indian sellers on Amazon
marketing their product worldwide.

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 Chapter 2
HISTORY

The first secure retail transaction over the Web was either by NetMarket
or Internet Shopping Network in 1994. Immediately after, Amazon.com
launched its online shopping site in 1994

In 1994 Jeff Bezos, a former Wall Street hedge fund executive,

incorporated Amazon.com, choosing the name primarily because it
began with the first letter of the alphabet and because of its association
with the vast South American river. On the basis of research he had
conducted, Bezos concluded that books would be the most logical
product initially to sell online. Amazon.com was not the first company to
do so; Computer Literacy, a Silicon Valley bookstore, began selling
books from its inventory to its technically astute customers in 1991.
However, the promise of Amazon.com was to deliver any book to any
reader anywhere.

While Amazon.com famously started as a bookseller, Bezos contended

from its start that the site was not merely a retailer of consumer
products. He argued that Amazon.com was a technology company
whose business was simplifying online transactions for consumers.

The Amazon.com business strategy was often met with skepticism.

Financial journalists and analysts disparaged the company by referring
to it as Amazon.bomb. Doubters claimed Amazon.com ultimately would
lose in the marketplace to established bookselling chains, such as
Borders and Barnes & Noble, once they had launched competing e-
commerce sites. The lack of company profits until the final quarter of
2001 seemed to justify its critics.

However, Bezos dismissed naysayers as not understanding the massive

growth potential of the Internet. He argued that to succeed as an online
retailer, a company needed to ―Get Big Fast,‖ a slogan he had printed on
employee T-shirts. In fact, Amazon.com did grow fast, reaching 180,000
customer accounts by December 1996, after its first full year in
operation, and less than a year later, in October 1997, it had 1,000,000
customer accounts. Its revenues jumped from $15.7 million in 1996 to
$148 million in 1997, followed by $610 million in 1998. Amazon.com‘s
success propelled its founder to become Time magazine‘s 1999 Person
of the Year.

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In 2002, it launched Amazon Web Services (AWS), which initially
focused on providing APIs for web developers to build web applications
on top of Amazon's ecommerce platform. In 2004, AWS was expanded
to provide website popularity statistics and web crawler data from the
Alexa Web Information Service.AWS later shifted toward providing
enterprise services with Simple Storage Service (S3) in 2006, and
Elastic Compute Cloud (EC2) in 2008, allowing companies to rent data
storage and computing power from Amazon. In 2006, Amazon also
launched the Fulfillment by Amazon program, which allowed individuals
and small companies (called "third-party sellers") to sell products
through Amazon's warehouses and fulfillment infrastructure.

Amazon purchased the Whole Foods Market supermarket chain in

2017.During the COVID-19 pandemic, Amazon introduced a hazard pay
of $2-per-hour, changes to overtime pay, and a policy of unlimited,
unpaid time off until April 30, 2020. The hazard pay increase expired in
June 2020, and the paid time-off policy in May 2022. Amazon also
introduced temporary restrictions on the sale of non-essential goods,
and hired 100,000 more staff in the US and Canada. Some Amazon
workers in the US, France, and Italy protested the company's decision to
"run normal shifts" despite many positive COVID-19 cases. In Spain, the
company has faced legal complaints over its policies. A group of US
Senators wrote an open letter to Bezos in March 2020, expressing
concerns about worker safety

On February 2, 2021, Amazon announced that Jeff Bezos would step

down as CEO to become executive chair of Amazon's board in Q3 of
2021. Andy Jassy, previously CEO of AWS, became Amazon's CEO.In
January 2023, Amazon announced job cuts for over 18,000 workers, in
an attempt to cut costs.

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 Chapter 3
PRODUCT AND SERVICE AND STATEMENT OF AMAZON

 Product & services :

Amazon.com's 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. In August 2019, Amazon applied to have a liquor store in San
Francisco, CA as a means to ship beer and alcohol within the
city. Amazon has separate retail websites for some countries and also
offers international shipping of some of its products to certain other
countries.

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

including:

 Amazon fresh
 Amazon prime
 Amazon web service
 Alexa
 Appstore
 Amazon drive
 Echo
 Kindle
 Fire tablets
 Fire TV
 Video
 Music
 Music unlimited
 Amazon digital game store
 Amazon studios
 Amazon wireless

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  MISION , VISSION AND VALUES:

1. MISSION STATEMENT

Amazon‘s mission statement is ―We strive to offer our customers the

lowest possible prices, the best available selection, and the utmost
convenience.‖ This corporate mission promises attractive e-commerce
services to satisfy target customers‘ needs. The company focuses on the
variables of price, selection, and convenience. In this regard, the
following characteristics are identifiable in Amazon‘s corporate mission
statement:

1. Lowest price
2. Best selection
3. Utmost convenience

1. lowest price: The ―lowest prices‖ component of the mission

statement guides the pricing strategies included in Amazon.com
Inc.‘s marketing mix or 4P. Low prices are a selling point that
makes the company‘s e-commerce website and services
attractive. A corresponding strategic objective is to reduce
operational costs to enable the business to minimize prices.

2. Best selection and utmost convenience: Amazon‘s corporate

mission statement also points to having the best selection. For
example, the wide array of products on the company‘s website
is a factor that attracts customers. Moreover, Amazon.com
Inc.‘s corporate mission emphasizes convenience, such as in
accessing the company‘s products via the Internet. This
characteristic is a response to consumers‘ use of ―convenience‖
as a criterion when evaluating the quality and attractiveness of
online retail services.

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2. VISSION STATEMENT :

Amazon‘s corporate vision is ―to be Earth’s most customer-centric

company, where customers can find and discover anything they
might want to buy online.‖ This vision statement underscores the
business organization‘s main aim of becoming the best e-commerce
company in the world. In this regard, the following characteristics are
identifiable in Amazon‘s corporate vision statement:

1. Global reach : The ―global reach‖ component of Amazon.com

Inc.‘s vision statement is all about international leadership in the
e-commerce market. For example, in stating the ―Earth‖ as the
market, the company shows that it aims to continue expanding
globally. Thus, a corresponding strategic objective is global
expansion, especially through market penetration and market
development, which are included in Amazon.com Inc.‘s generic
strategy and intensive growth strategies.

2. customer-centric approach: The customer-centric approach

in Amazon‘s corporate vision statement shows that the
company considers customers as among the most important
stakeholders in the online retail business. This consideration
agrees with Amazon.com Inc.‘s corporate social responsibility
strategy for its stakeholders. Moreover, the corporate vision
indicates continuing efforts to broaden the product mix. These
efforts contribute to business growth and to making the
company‘s services more attractive to target consumers.

3 .CORE VALUE :

Amazon core values include ―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,
and deliver results.‖ Well, Amazon features a long list of values to guide
the operations of its business. Several key values can, however, be
singled out to have the greatest impact among this list:

 Customer obsession

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 Invent and simplify
 Hire and develop the best
 Deliver results
 Earn trust of others.

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 Chapter 4
AMAZON CUSTOMER VALUE PROPOSITIONS

Advantages and Disadvantages of FulfillmentBy Amazon

What is Fulfillment by Amazon?

―You sell it, we ship it.‖ That‘s the premise behind. Retailers can
outsource the time-consuming tasks associated with order fulfillment
(picking, packing, and shipping) and reduce and/or eliminate the costs
associated with warehouse operations. As a result, retailers can sell
more, ultimately enabling them to grow faster and compete more
effectively in a crowded marketplace.also allows sellers to take full
advantage of Amazon‘s superior logistics network.

Advantages and disadvantages of amazon.

 Advantages of Amazon

Cheap and hassle-free shipping – The pick, pack, and ship process
can be tedious, especially when fulfilling hundreds to thousands of
orders each day. Amazon (literally) does all the heavy lifting, from
locating the products in the warehouse, printing the shipping label,
packing the order, and sending it out the door. This service allows
retailers to focus more on growth-oriented tasks and spend less time on
managing warehouse and logistics operations

Simplified Returns Process – Any retailer knows that returns

management can become extremely complicated when selling on
multiple channels, especially without the right software in place. With
FBA, Amazon manages the entire returns process — from
communicating with the customer to issuing an RMA, receiving and
inspecting the item for defects, issuing a refund or sending a
replacement item, placing the item back into inventory, and relisting the
item to be resold.

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Customer Benefits –retailers automatically qualify for Amazon Prime,
meaning Prime customers can get free two-day shipping on products,
and all other Amazon customers can take advantage of free shipping on
orders over $25. This customer segment is important because many of
the 80 million Amazon Prime users exclusively use their membership for
online shopping.

Increased Visibility – Retailers using are listed higher in the buy box
than non retailers. Simply put, their products are more likely to be on the
first page of search results than a competitor who does not use Amazon
services. This boosted visibility translates to into more sales.

 Disadvantages of Amazon

Fees – Amazon holds merchants accountable for various fees. These

charges include monthly storage fees, order fulfillment fees, pick-and-
pack fees, and weight handling fees. Also, Amazon charges long-term
storage fees on a semi-annual basis. These fees can be complicated to
calculate and for the most part, are unavoidable. It is vital for retailers to
accurately estimate these costs in order to avoid a loss on sales.

Managing Split Shipments – A common frustration associated with

FBA is managing split shipments to multiple Amazon fulfillment
locations. Although these multiple fulfillmentcenters shorten delivery
times for customers, it‘s expensive, inconvenient, and time-consuming
for retailers, and may cut deep into profit margins.

Limited Brand Awareness & Re-Marketing Capabilities – Unlike

brick-and-mortar retailers, ecommerce retailers lack face-to-face
customer interactions. Therefore, they have to rely heavily on brand

21
building and customer data for re-marketing. Ecommerce retailers miss
out on both of these opportunities when using Amazon. Amazon uses an
Amazon-branded box to ship orders and a private database to store
customer information.

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 Chapter 5
BUSINESS STRATEGY OF AMAZON

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.

 Goals and Objectives — and What It Means for Retailers

In a letter to shareholders, Amazon outlines the four principles that guide

the company: customer obsession rather than competitor focus, passion
for invention, commitment to operational excellence and long-term
thinking. In both their online and physical locations, the focus is on
selection, price and convenience. Last year,

Amazon‘s retail strategy was dominated by its acquisition of Whole

Foods and a nationwide search for a second headquarters — all while
continuing to focus on increasing its customer base with both online and
offline shopping experiences. Here‘s an overview of Amazon‘s strategy
in 2019.

1. Amazon Bookstore

The physical store format continues to be a success for Amazon,

seamlessly integrating offline shopping with the benefits of amazon.com.
Inventory varies by location, based on customer data, reading habits and
recommendations. In addition to books, the most highly rated devices,
games and toys are also available for shoppers to try out in-store.
Another unique Amazon marketing strategy? No prices are displayed.

2. Grocery Shopping Options

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Amazon continues their test, learn and pivot strategy with grocery
shopping and delivery service options, believing that selling groceries to
a customer is key to selling them everything else. More importantly for
Amazon, the strategy further embeds their brand into our daily routines.
Amazon Go, the first-of-its kind physical store without cashiers or
checkout lines opened after extensive testing with Amazon employees,
and currently has 10 stores in three cities. Offering ultra-convenience,
the store sells grocery items and prepared foods.

Amazon‘s Whole Foods acquisition has allowed the company to

experiment with grocery delivery services, offering discounts to Whole
Foods shoppers who have an Amazon Prime membership and even
selling Amazon devices inside the Whole Foods stores. Future plans call
for additional, larger stores with space for more items and online order
pickup services.

3.Amazon 4-Star and Pop-up Stores

One of Amazon‘s more recent brick-and mortar ventures, Amazon 4-

Star, is inspired by its customers. The stores sell items rated 4 stars and
above, as well as new and trending items on amazon.com. Prime
members receive special pricing, and customers who aren‘t Prime
members can sign up for a 30-day trial to instantly receive the
amazon.com price in the store.

Amazon‘s pop-up store concept was created a few years ago to give
shoppers the opportunity to test-drive and purchase devices and get
advice from Amazon consultants. This strategy has allowed Amazon to
blend online price with in-store convenience in locations where
consumers are already shopping.

4.Roaming Treasure Truck

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Tapping into the FOMO (fear of missing out) concept, the popular
Treasure Truck has expanded to 30 cities, according to Amazon‘s
website. Each truck contains new, trending and local hand-picked items,
stirring up excitement and anticipation as it cruises through cities.

5.Promoting products on Alexa

Nearly one in five U.S. adults today have access to a smart speaker,
according to recent research. The concept of shopping by voice brings
new challenges to advertisers who must find new ways to get in front of
these shoppers. The Amazon business model in 2019 reportedly
includes exploring the idea of helping consumers discover new products
through ads as well as allowing companies to target Alexa users based
on past shopping behavior.

6. Amazon-branded bank accounts

Amazon is reportedly considering a product that would appeal to

younger customers and those without bank accounts. Partnering with a
financial company to offer co-branded financial services and products
versus creating their own may enable Amazon to avoid burdensome
regulation. What‘s in it for Amazon? A strategy like this would give the
retail giant even more valuable data on customers‘ income and shopping
habits.

7. Amazon Prime.

CEO Bezos recently announced that Amazon has exceeded 100 million
paid Prime subscribers. (That‘s more than Costco). While the price of an
Amazon Prime membership has increased, the focus appears to be
more on retention versus acquisition. Recent products and services
added to Prime memberships include free

e-books, photo storage, ad-free music, discounts at Whole Foods, and

Amazon Key, a service which enables delivery inside your home.

25
What Retailers Can Learn From Amazon’s Marketing Strategy: 5
Tips for Success

Both brick-and-mortar and online retailers face competition from

Amazon, but that competition also invites opportunity. To survive and
thrive in 2019, retailers will need to adapt to changes in consumer
behavior and develop customer-focused strategies that integrate data
and technology to deliver more personalized customer experiences.
Here are five takeaways retailers can learn from Amazon‘s business
strategy.

1. Know the customer.

In addition to understanding your customers‘ wants and needs,

understand what complaint them to shop elsewhere. Take that
knowledge and put it into action.

2. Maximize data.

Take advantage of every touchpoint to create a more personalized

customer experience. Leverage your customer data to gather behavioral
insights. Reach out to other departments in your organization for
additional customer feedback and data.

3. Get obsessive with customer service.

Start by building a customer-centric culture from the top all the way
down. Empower your line associates. Stronger customer connections
will lead to more useful feedback that helps keep retailers focused on
delivering what matters to customers.

4. Be innovative.

Test new ideas and don‘t be afraid to fail. For example, update design
and merchandise to attract customers or embrace technology to provide
better service.

26
5. Create a comprehensive CRM strategy.

Integrate transactional, demographic and behavioral data with the right

systems and technology to develop actionable customer profiles. Use
data and technology to add value to the customer experience by offering
more personalized experiences.

Amazon‘s Achievements

FastCompany magazine listed Amazon as the most innovative company

of 2017 while Forbes ranked Amazon 3rd on their list of most innovative
companies of 2017. Further, Amazon ranked 3rd in MIT‘s Smart
companies 2017 listing as well, following Nvidia and SpaceX.

Amazon Fortune 500 rankingThis is not it.

Amazon ranked 8th on Fortune 500 2018 list and in 2019 it made in the
top 5 – It‘s the best rank ever since Amazon made its presence in the
magazine for the first time in 2002. Since then, the company has been
continuously listed on the coveted list, each time with a rank better than
the previous year.

27
Growing Revenue

In the last five years, the sales of Amazon increased by 161% – a

whopping $280.52 Billion in 2019 – from $107 billion in 2015. In 2019
alone, the revenue grew by 20.8% when compared to 2018.

The chart below portrays Amazon‘s revenue for the past five years. In
Billions. Mighty numbers, Amazon!

Amazon Revenue 2019Launching their services to more markets and

expanding horizons, Amazon – as a result of their eCommerce business
model – increased their sales numbers and customers and hence
Revenue. Besides, its AWS business contributes hugely to Amazon‘s
revenue stream.

Amazon is equally expanding the operations for its three segments –

North America, International, and AWS – where it offers its products and
services to consumers, sellers, as well as developers, enterprises, and
content creators.

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Amazon 2019 Revenue DistributionUnsurprisingly, a big part of
Amazon‘s revenue comes from North America. Internationally, the
company‘s revenue increased from $65.86 billion in 2018 to $74.72 in
2019 as Amazon Prime has become a huge success in some of the
Asian and European markets.

Further, the 12.5% revenue of $35.03 billion in 2019 was generated from
Amazon Web Services – a subsidiary to provide big consumers on-
demand cloud services. In 2017, the company rendered more than 90
services of cloud computing with the tools of the Internet of Things (IoT).
Big shots comprising Netflix, Unilever, GE, and NASA form some of the
consumer bases that use AWS for better web services.

SWOT Analysis of Amazon

Everything that you ever wanted to buy is at one place, and the name
of this place is Amazon. When Jeff Bezos started his business in
1994, Amazon was one of the few Internet retailers and, certainly, had
ample opportunities to turn into the tech giant. However, things change

29
quickly, and now Amazon is to review its achievements and, possibly,
chart a new development plan.

Amazon is the world‘s leading online retailer and its success has spurred
other physical, brick, and mortar retailers to have an online presence. It
is often referred to as the online equivalent of Wal-Mart because of its
reach and global footprint as well as its aggressive pricing strategies.
Amazon can leverage on several opportunities in the emerging markets
and can ensure that its global supply chain of networked

warehouses deliver substantial value for itself and its stakeholders.

Further, Amazon has to rethink its

business model of operating at close to zero margins and the fact that
the company has not returned a decent profit in the last five years gives
it much room for improvement.

1.Strengths

Strong background and deep pockets – Built on its early successes

with books, Amazon now has product categories that include electronics,
toys, games, home and kitchen, white goods, brown goods and much
more. Amazon has evolved as a global e-commerce giant in the last 2
decades
.
Customer centric: Company‘s robust CRM has created customer
centric processes in order to carefully record data on customer‘s buying
behaviour This enables them to offer individual items, related items
or bundle them as an offer, based upon preferences demonstrated
through purchases or items visited. Also, the company claims that 55%
of their customers are repeat buyer resulting in low cost of acquisition of
new buyers.

Cost leadership: In order to differentiate itself, company has created

several strategic alliances with other companies to offer
superior customer service. The most important strategic tie ups are with

30
logistics providers who control costs. This contributes in a strong value
chain. Because of playing on economies of scale, Amazon is able to
lower the inventory replenishment time.

Efficient delivery network: With its strategic partners & due to its
Amazon fulfilment centers, Amazon has created a deep &
structured distribution network in order to make the product available
even at remote locations. It also has free of cost delivery charges in
certain geographies.

Acquisitions: Acquiring companies like Zappos.com, Junglee.com,

IMBD.com, woot.com etc. has proven to be a successful and revenue
generating step for the E commerce giant.

2. Weakness

Competition and shrinking margins: For several years, Amazon has

been in the midst of the price wars and has witnessed its margins
shrinking. Experts report that the company lost as many as $359 crs in
India in just one fiscal year.

Tax Avoidance issue: Amazon has attracted negative publicity on

account of Tax Avoidance in countries like U.S & UK. Most of its revenue
is generated from these well established markets.

High Debt: In many developing nations Amazon is still struggling to

make the business profitable thereby affecting the
overall profitability of the group resulting into High debt.

Product flops – Amazon launched the fire phone in the US which was a
big flop. At the same time, kindle fire did not pick up as strongly as
Kindle did. Thus, there were several product flops which caused a dent
in Amazon‘s deep pockets.

31
3.Opportunities

Backward Integration: Amazon can come up with its In-house brands

in different product categories. They can also differentiate their offering.
This will help them make profits in highly competitive E-commerce
market.

Global Expansion: Expansion mainly in Asian & developing economies

will help Amazon because those are the markets with low competition in
E-commerce industries & are not saturated like developed economies.

Acquisitions: By acquiring E-commerce companies it can decrease the

competition level & also can use the specialized capacity of the other
company.

Opening physical stores outside U.S: By doing this Amazon can help
the customers to engage with the brand, resulting in increase in repeat
purchases & increase in loyal customer base.

4.Threats

Low entry barriers of the industry: Low entry barriers affect the
current player‘s business as more & more company means tough
competition, price wars, shrinking margins & losses resulting into
questioning the sustainability of the players.

Government regulations: Not having clarity on the issues related to

FDI in multi brand retail, has been a big hurdle in the success of the E-
commerce players in many developing nations.

Local competition – India has Snapdeal and Fipkart who are local E
commerce retailers and are taking away majority of the market. Similarly,

32
there are many local players who take bites from the market share
thereby making it hard for a big player like Amazon to make profits.

33
 Chapter 6
THE BUSINESS MODEL OF AMAZON

Investors just can‘t seem to get enough of Amazon. Even though

Amazon is already the world‘s fifth-largest company, investors believe
that it is only just getting started! It already has revenues of $125 billion
per annum. It is targeting revenues of more than $500 billion in the next
few years. Startups have grown at this astounding pace earlier.
However, Amazon is no longer a startup. It is a fledgling company with a
multi-billion dollar business. If Amazon can grow even at half the speed
that it aims it, it will be the world‘s most valuable company in no time! As
students of good business practice, it, therefore, makes sense to study
the business model being used by this very innovative company.

Amazon’s key customer value propositions

Jeff Bezos regularly points out Amazon‘s three customer value
propositions:

1. Low prices
2. Fast delivery speed (often same day and with options of free 2-hour
delivery) and a
3. Vast selection (―Earth‘s biggest selection‖)

Today, we are going to look at these elements, starting with the mind-
boggling amount of selection, moving onto the prices and then covering
the customer experience (with fast delivery being an important element
thereof).

WHAT FACTORS DRIVE YOU DO PURCHASED ON AMAZON?

34
Value Proposition

The value proposition provided by Amazon is simple. They offer the

most convenience, widest range and the lowest prices. Their prices are
so low that they have displaced Wal-Mart as being the leader is low price
category! The amazing part about Amazon is that it provides goods and
services at extremely low cost without compromising on quality by any
means. Amazon makes the lowest prices possible by leveraging
technology. Firstly, it has leveraged technology in such a way that it
does not have to stock inventory of any kind. While other stores are
reeling under the massive cost burdens of stocking inventory, Amazon
can afford to undercut the competition on this.

35
It is a mix of a retail company as well as a technology company. Unlike,
retail companies, Amazon seldom hires stock clerks and floor managers.
Their employees have high technological skills like data mining etc

 Revenue Model

Amazon has a diverse revenue model.

 The primary source of revenue for Amazon is the commissions

and fees that it obtains by making the borrowers and sellers meet.
Amazon doesn‘t sell a lot of stuff on its own. It just provides a
marketplace guaranteeing a standardized experience for both the
buyers as well as the sellers.
 Amazon also derives a huge chunk of its revenues from affiliate
programs. Amazon provides affiliates with stores within their sites.
It then charges a larger commission on their sales.
 Amazon also sells advertising space on its website. The Amazon
site is one of the most visited pages in any region. Hence, sellers
can expect to boost sales by advertising on it. This is a miniscule
portion of the revenue that is generated by this company but is
nonetheless significant.
 Amazon also makes a huge chunk of money from the Kindle
marketplace. Amazon has developed and sold a device called
Kindle. It can be used to read books in the electronic format.
Thanks to this device, Amazon has a 75% market share in the
eBook market. Also, this market is highly profitable for Amazon.
Books sold by this model do not have to be published or
transported. Amazon, therefore, pockets the share of the publisher
as well as the logistics firm. Amazon gets close to 70% of the
revenue generated by selling eBooks on Kindle.
 Lastly, Amazon has also developed subscription based business
models via its Amazon Prime service. For a fixed subscription
users get two benefits. Firstly, users can stream movies and other
video content via the internet. Secondly, Amazon Prime members
are entitled to lightning fast delivery of the products purchased
from Amazon.

36
Competition

Amazon faces a wide variety of competition from different types of

companies. There are brick and mortar stores. Then there are other e-
commerce sites and also video streaming sites like Netflix. However,
none of these competitors seem to be formidable. Amazon is the
aggressor is almost all lines of business and is snatching business away
from others rather than defending its own turf.

Technology

Amazon has always been at the center of several technological

advancements since its inception in 1994. In 2016, they have pioneered
a new technology called contactless stores. These stores have been
branded as ―Amazon Go‖ stores. The unique selling point of these stores
is that there are no humans involved. Amazon has achieved such high
levels of automation, that they can run an entire departmental store
without having any employees! It is technological advancements like
these that will allow Amazon to reach its ambitious revenue targets.
Although at first, the revenue targets seem ludicrous, Amazon seems to
have a plan!

To sum it up, Amazon has a unique business model. The hybrid tech
cum retail model was pioneered by Amazon in 1994. Ever since it has
not let go of the first mover advantage. Even today, Jeff Bezos pays no
dividends and reinvests all the extra profits back into the operations
signaling that Amazon is still not a mature company and that it still
preparing to grow rapidly.

 Amazon business model, how big is amazon?

Amazon is now the world‘s biggest online retailer dealing in every

possible product and service you can think of. From books, music,
videos, groceries, software, to web services, game studios, publishing
houses, patents, etc. Amazon Business Model consists of all.

Amazon has evolved to become an ecosystem over the past 20 years.

Everyone who has ever accessed internet must have encountered an
37
Amazon service. Amazon‘s business strategy is so well planned and
well-designed that it has multiple and independent revenue
sources which are somehow connected.
How big is Amazon‘s business model.

Amazon Marketplace – Revenue generated through commissions and

other charges from sellers.

Amazon Books – The company earns revenue by selling books on

Amazon marketplace, book depository, and AbeBooks, audio books on
audible, comics on ComiXology, and through Amazon publishing. It also
created an all new e-book demand by introducing Kindle in the market.
Amazon also owns physical bookstores in some countries.

Amazon Music and Videos – Amazon Business Model includes star

websites like IMDB and twitch.tv which makes loads of money for
Amazon. Amazon Music and Videos also add to the revenue.

Amazon Gaming – Amazon‘s subsidiary, Amazon Game Studios, is one

of the renowned names in the game development industry. Amazon
Digital Game Store sell third-party games as well.

Amazon Web Services – The company is among the top IT

infrastructure providers in the world which also provide support
to CIA and Netflix.

Amazon Fire Products – Amazon launched its fire range of products

which include phones, tablets, Tv and Mobile OS.

Amazon Prime – The company provides premium membership to its

every service through Amazon prime.

Amazon Patents – Amazon holds more than 1000 patents many of

which are licensed by other companies.

To dig more intensely about Amazon Business Model, we have to first

learn about How Big is Amazon and what all products and services it
offers.

Amazon Marketplace

38
Amazon Marketplace (amazon.com) is an e-commerce platform where
products from Amazon and third parties are sold to the users.
Amazon marketplace operates just like any other
usual eCommerce marketplace – by the interaction of sellers and
buyers. Amazon just provides the world-class facilities to them.
Unlike the basic marketplace business model of Alibaba.com, Items sold
on Amazon by third-party sellers are either Fulfilled By Merchant (FBM)
or Fulfilled By Amazon (FBA). FBM goods are kept in the third-party
seller‘s inventory, and shipping and customer service are handled by the
third-party merchant. FBA goods are stored in Amazon‘s fulfilment
centres, and shipping and customer service are handled by Amazon.
Amazon charge commission (referral fee) from third-party sellers. These
commissions differ for different types of goods sold. FBA fee, which
includes a pick, pack, and weight charge, is also charged from third-
party sellers who choose to use FBA.
With millions of active user accounts and a worldwide reach, Amazon
also charges its sellers to advertise and promote their brands and
products by listing them on the top of the search results (and on the
homepage).

Amazon Books
The company still makes money from books and it is not limited to the
marketplace. Amazon business model has been diversified to include
many online book retailers, book catalogues, comics‘ distribution
platforms, and other books and e-book services.

Though revenue is generated only from a few of the services (like

Audible, Goodreads, Abebooks, Amazon Books, Comixology, Book
Depository, Amazon Publishing, and Amazon Kindle), other services
(like LibraryThing, Omnivoracious, Bookfinder, etc) in Amazon business
model act as affiliates and/or helps Amazon in other marketing related
strategies.
Audible
Audible is a digital store that sells digital audiobooks, radio and TV
programs, and audio versions of magazines and newspapers.

 Amazon Books

Online bookstore on Amazon websites.

It also owns physical bookstores in some countries.

39
  Goodreads
Goodreads is the world‘s largest site for readers and book
recommendations. It generates revenue from advertisements and
affiliates.

 Abebooks.com
Amazon-owned online marketplace for brand new books, used
books, rare books, and out-of-print books.

 Comixology
Amazon-owned cloud-based digital distribution platform for comics with
over 200 million comic downloads across Android, iOS, Kindle
Fire, Windows 8, and the Internet.

 Book Depository
BookDepository.com is the fastest growing bookseller in Europe, offering
over 16 million titles to the customers of over 100 countries. It was
acquired by Amazon in 2011.

 LibraryThing
Amazon-owned cataloguing and social networking site for book lovers.

 BookFinder.com
E-commerce search engine for books which has partnered with major
online listings services and bookstores, aggregating the inventories of
well over 150,000 booksellers on their site.

 Omnivoracious.com
Also known as The Amazon Book Review. It has served as the place for
the Amazon Books editors to talk about their passions for fiction,
nonfiction, cookbooks, kids‘ books, mysteries, romance, and science
fiction.

40
  Amazon Publishing
Amazon’s book publishing unit, composed of a number
of imprints including AmazonEncore, AmazonCrossing, Montlake
Romance, Thomas & Mercer, 47 North, and Powered by Amazon. It was
launched in 2009.

 Amazon Kindle
Amazon Kindle is a series of e-readers designed and marketed
by Amazon which enable users to browse, buy, download and read e-
books, newspapers, magazines and other digital media via wireless
networking to the Kindle Store. The USP of Kindle over other devices is
the use of electrowetting technology (colour e-paper video screens)
which Amazon acquired when it bought Liquovista.
Kindle Store is an online e-book e-commerce store operated
by Amazon to supplement its Kindle series. Kindle store can be
accessed on any device ranging from Kindle devices to Android, iPhone,
and PC.

 Amazon Music and Videos

Amazon has expanded its revenue model to make money from the rising
music and videos market. Nearly all of them generate revenue for
Amazon.
IMDB
The Internet Movie Database is world‘s most popular and authoritative
source for movie, TV and celebrity content with a searchable database
of more than 185 million data items including more than 3.5 million
movies, TV, and entertainment programs and 7 million cast and crew
members.

IMDB earns through advertisements, subscriptions (IMDB Pro.), content

licensing, and through publicity photo customers who upload their
photos for promotion. IMDB was acquired by Amazon in 1998.

Twitch.tv
Twitch is the world‘s leading social video platform and community for
gamers, video game culture, and the creative arts. It is the most popular
streaming website for live video games. Just like other video websites
like Youtube, Twitch makes money through advertisements, and through
paid memberships (twitch turbo).

41
  Amazon Echo and Alexa

 Amazon Echo is a smart speaker which is capable of voice

interaction, music playback, making to-do lists, setting alarms,
streaming podcasts, playing audiobooks, and providing weather,
traffic, and other real-time information.

 Amazon’s Alexa, just like Apple‘s Siri and Microsoft‘s Cortana, is

an intelligent personal assistant made popular by the Echo(Alexa
is integrated into Echo).

 Amazon Music is an online music store and music locker

operated by Amazon. Just like Spotify and other competitors,
Amazon Music provides users subscription for unlimited music at a
fixed cost per month.

 Amazon Video is an Internet video-on-demand service developed

and operated by Amazon. It offers television shows and films for
rental or purchase and as part of Amazon‘s Prime subscription.
Like competitors, Amazon has pursued a number of exclusive content
deals to differentiate its service.

 Amazon Gaming
Amazon owns Amazon game studios, game developers based in the
US. This company has been merged with Reflexive Entertainment and
Double Helix Games after their acquisition by amazon.com.

 Amazon Digital Game Store is a digital video game distribution

service owned by Amazon. These games are sold on
amazon.com.

 Amazon Web Services

In 2006, Amazon Web Services (AWS) began offering IT infrastructure
services to businesses in the form of web services — now commonly
known as cloud computing. Today, Amazon Web Services provides a
highly reliable, scalable, low-cost infrastructure platform in the cloud that

42
powers hundreds of thousands of businesses in 190 countries around
the world.

 Amazon Fire
In addition to other product ranges, Amazon has also launched its fire
range which deals mainly with computers, phones, and tablets.

 Kindle Fire is a tablet computer developed by Amazon.

 Fire Phone is a smartphone developed and launched by Amazon

in 2014.

 Amazon Fire OS is an Android-based mobile OS produced

by Amazon for its Fire range of products.

 Amazon Prime
Amazon Prime is the premium subscription offer for users of Amazon at
a price of $99 per year or $10.99 per month.
Amazon Prime includes –

 Free Two-Day Shipping with Amazon Prime

 Instant access to video streaming
 Over two million songs on Amazon Music. Thousands of playlists
and stations.
 Original audio series from Audible
 Twitch Prime
 Free unlimited photo storage
 30-minute early access to select Amazon Lightning Deals

Amazon Patents
Amazon owns a total of 1263 Patents which has guaranteed its stay in
the market for long. One of the most valuable patents owned by
Amazon is 1 click buying which is a technique of allowing customers to
make online purchases with a single click. This patent has been licensed
to Apple to use it in their online store, Itunes Store, and iphoto.

43
Annual net sales of Amazon in selected leading markets from 2014
to 2019

(in billion U.S. dollars )

Amazon revenue

Founded in 1994, Amazon has grown into one of the biggest e-

commerce marketplaces and cloud computing platforms worldwide. In
2018, Amazon was ranked first in terms of company revenue among
global publicly traded internet companies. With an annual revenue of
almost 233 billion U.S. dollars, the e-retailer

ranked far ahead of closest competitors Google (136.22 billion U.S.

dollars) and Facebook (55.84 billion U.S. dollars).

44
Amazon shopping

Amazon is the leading e-retailer in the United States. In 2018, an

estimated 58.7 million households in the United States held a
membership with the company‘s subscription service Amazon Prime,
benefitting from free 2-day

shipping, music and video streaming and exclusive offers and deals.
Amazon Prime members are very engaged shoppers: a February 2019
survey found that 20 percent of Amazon Prime shoppers made
purchases on the website a few times a week, compared to only three
percent of non-Prime shoppers. Using their regular account, an Amazon
customer can seamlessly order from any regional Amazon site and also
access third-party seller offerings from their local platform, enabling
customers to make cross-border purchases without any extra effort.

45
 Chapter 7
MARKETING MIX

mazon.com Inc.’s Marketing Mix (4Ps) Analysis

Amazon.com Inc. uses its marketing mix as a powerful approach to

attract consumers to its e-commerce website. A company‘s marketing
mix or 4Ps (Product, Place, Promotion and Price) is the combination of
strategies and tactics used to implement a marketing plan. In this regard,
Amazon reaches out to its target online market through its marketing
mix, which focuses on the place and price components as major selling
points. As the biggest e-commerce organization in the world, Amazon
continually faces increasing competition, which can reduce the
company‘s market share and global growth potential. To address this
issue, the company must ensure that its marketing mix is up-to-date
relative to market trends. Through a suitable marketing mix, the
company enables organizational resilience while supporting innovation
for long-term competitiveness of its online retail business.

Amazon.com Inc.’s Products (Product Mix)

In this component of the marketing mix, Amazon‘s products or product

mix is considered. As the top player in the online retail industry, the
company offers a wide selection of products. Such a product mix
supports Amazon.com Inc.‘s mission statement and vision statement.
Through continued expansion and diversification,

the company‘s products now include not just online retail, but also a
variety of other products that address market needs:

Retail service

Retail goods

Amazon Prime

46
Consumer electronics

Digital content distribution service

Amazon Video

Amazon Web Services (AWS)

Amazon Publishing

Amazon Fresh

Amazon Prime Pantry

Amazon Dash

Video Direct

Amazon is primarily an online retail business. As such, its main product

is retail service. The company provides such service through its e-
commerce website. Some of the retail goods available on the website
are also the company‘s, such as those sold under the Amazon Basics
brand. In addition, the firm offers Amazon Prime, which is a membership
product that includes shipping service for purchases on Amazon‘s online
retail website.

The company has also expanded its product mix to include consumer
electronics like the Amazon Kindle e-book reader and the Kindle Fire
tablet. Such expansion led to an improvement of the effectiveness of the
company‘s marketing mix in getting a bigger share of the e-commerce
market. Further broadening of the firm‘s product mix involved the
distribution of digital content, including music and e-books.

Amazon Video is an on-demand video streaming service offered to

customers in some locations in the United States, Europe and Japan.
On the other hand, Amazon Web Services (AWS) is a set of online
services, including cloud storage. Amazon Publishing offers book-
publishing service using a number of imprints. Moreover, AmazonFresh
and Amazon Prime Pantry are the company‘s services for orders and
delivery of grocery items. Furthermore, the company has integrated
additional

47
technology in the purchasing process. For example, Amazon Dash
involves a device that enables customers to purchase household items
by simply clicking a button that connects to the Internet. Video Direct
enables sale or ad-supported free viewing of user-generated videos.
These product lines indicate the company‘s efforts in continually
broadening its product mix. Amazon.com Inc.‘s marketing mix increases
in effectiveness as more products are added to these e-commerce
offerings.

 Place/Distribution in Amazon’s Marketing Mix

The venues used to reach target customers are identified in this

component of the marketing mix. Amazon.com Inc. is a mainly online
business organization. Nonetheless, the company uses the following
places to reach its e-commerce customers:

Official e-commerce websites

Amazon Books

Others

Amazon uses its official e-commerce websites as its primary places for
transacting with customers. These websites include Amazon.com,
Audible.com (a subsidiary), and a number of other sites with specific
target markets. In addition, the company operates a physical bookstore
named Amazon Books in Seattle. This location enables the company to
reach out to customers who want to physically evaluate products before
purchase. Moreover, the firm uses other venues to temporarily transact
with customers. For example, the annual Amazon Web Services (AWS)
Summit held in various locations enable the company to reach potential
customers and persuade them to pay for its e-commerce services. In this
regard, Amazon‘s marketing mix significantly relies on the strong online
presence of the organization in reaching its target customers.

48
 Amazon’s Promotion (Promotional Mix)

This component of the marketing mix involves the strategies and tactics
that a company uses to communicate with its target market.
Amazon.com Inc. aims to persuade its customers to visit its websites
and pay for its online services. The following strategies and tactics are
used in such promotional mix, arranged according to importance in the
company‘s e-commerce business:

Advertising (most important)

Sales promotions

Public relations

Direct marketing

Advertising functions as the primary means for Amazon to communicate

with its target market. For example, the company has an affiliate
program for website owners or online publishers to earn revenues by
displaying advertisements and corresponding links to products sold on
the Amazon.com website. This strategy widens the company‘s market
reach. Also, Amazon.com Inc. applies sales promotion as a secondary
strategy to attract customers and persuade them to purchase goods and
services on the website. For example, the company occasionally uses
discounts and special offers to generate more sales. On the other hand,
the firm strengthens its brand image through public relations programs,
such as Amazon Smile, which donates a percentage of sales to
charitable organizations.

 Amazon’s Prices and Pricing Strategies

This component of the marketing mix focuses on the price levels and
pricing strategies a firm uses in selling its products. Amazon.com Inc.
uses low prices as a way of attracting customers to its e-commerce
website and product offerings. Nonetheless, given the variety of the
company‘s products, the following pricing strategies are used:

49
Market-oriented pricing strategy

Price discrimination strategy

Value-based pricing strategy

Amazon uses market-oriented pricing as its primary pricing strategy. For

example, the company evaluates competitors‘ prices as basis for pricing
AmazonBasics products. The advantage of this pricing strategy is that it
makes selling prices more competitive, affordable and attractive to target
consumers. On the other hand, the price discrimination strategy involves
setting different prices for the same product. Amazon applies this pricing
strategy through its different websites. For instance, the company‘s
prices for the same products are different between the United States and
the United Kingdom, which has its own Amazon website (amazon.co.uk).
This strategy is advantageous because it enables the company to adjust
its prices based on national market conditions, perceived value of
products, and consumer

preferences and expectations. In relation, Amazon.com Inc. uses the

value-based pricing strategy, which involves price levels based on
product value, considering consumers‘ perception of value.

Description of How Amazon Uses eBusiness and eCommerce for

B2B and B2C

When it comes to the terms "e-commerce" and "e-business," there's no

significant distinction between the two. "PC Magazine" notes their
general interchangeability as well as their shades of difference. The
starkest difference in terms of how Amazon does business is between
business-to-business (B2B) and business-to-consumer (B2C)
commerce. And surely, Amazon does both. How that affects you as a
small business owner depends mostly on what it is that you are seeking
from Amazon.

50
Disambiguation

More specifically, e-commerce involves the ability to buy and sell online,
while e-business has more to do with doing business in some form
online -- whether that's buying, selling, marketing or otherwise. E-
business, then, is a broader term that encompasses much more than the
term e-commerce, and Amazon is involved in both. Furthermore,
Amazon doesn't keep its e-business and e-commerce practices to itself;
instead, it invites other businesses to benefit from Amazon's B2B and
B2C applications.

Business-To-Business (B2B)

The business-to-business side of Amazon is diverse. For one thing,

Amazon provides businesses with a means to sell directly on Amazon
by setting up their own pages on which they list items for a nominal fee
per transaction or per subscription. Additionally, the Amazon Payments
service gives businesses a way to accept payments on their websites
from buyers who have Amazon accounts. Beyond that, the Amazon
Supply service is a way for businesses to purchase industrial supplies -
- including office and shipping materials -- directly from Amazon. In
addition, Amazon offers order fulfillment, which lets businesses
delegate order packing and shipping to Amazon from any one of
Amazon's warehouses located nationwide.

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,

51
Amazon provides consumers with discounted instant video and e-books
as well as free shipping specials for a monthly fee.

Comparison

Amazon's B2B and B2C services do not include auction-style sales like
its competitor, eBay. Rather, all prices are fixed prices. Amazon also
competes with Google, a company that itself has entered the business-
to-business realm by connecting businesses with relevant suppliers.
However, while Google might provide services -- such as email, for
instance -- that Amazon does not, 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.

 Difference between Flipkart and Amazon

Key Difference:

Flipkart is an online internet commerce company founded by

SachinBansal and BinnyBansal in 2007. Amazon is an international
online commerce company that is headquartered in Seattle, United
States. Amazon began its Indian operations in 2012. Flipkart and
Amazon are two of the biggest online retail companies in India.

Ecommerce and expanded the shopping experience with shopping now

as easy as sitting at home and clicking on items to add them to the
inventory.

52
It is headquartered in Banglore, India. The company is registered in
Singapore, and owned by a Singapore-based holding company. Similar
to Amazon, Flipkart initially started operations in books and later forayed
into other products. Although, the company is registered in Singapore, it
sells goods in India through a company called WS Retail, as foreign
companies are not allowed to do multi-brand e-retailing in India. Flipkart
also has launched its own products under the name of DigiFlip and
Citron.

Amazon is an international online commerce company that is

headquartered in Seattle, United States. It began operations with sales
of books and later forayed into the electronic market. Amazon began its
Indian operations in 2012, giving Flipkart and Snapdeal a run for its
money. It launched the Indian operations under Junglee.com, a website
that allowd retailers in India to advertise their products for free to millions
of Indian shoppers and drive targeted traffic to their stores. While,
Flipkart focuses a majority of its sales on mobiles, sales of amazon
products range from books to DVDs, CDs, etc. Amazon has also
launched its own products such as Kindle. Amazon has recently been in
the news for investing to develop drones, which are expected to do the
delivering for them.

53
Amazon Both the companies are giving each other tough competition,
with one launching an innovation and the other one having to follow
through as well. Following Amazon‘s launch in India, it introduced a
‗same-day delivery‘ option, which allowed customers to pay a little extra
to order the product on the same day. Soon after, Flipkart launched a
similar option. Another difference is that Flipkart opts for clubbing
deliveries together, say if a person orders two books, Flipkart will attempt
to ship both of the books together. However, Amazon will ship them
separately if they come from different place.

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 Chapter 8
SUPPLY CHAIN

Amazon first launched its distribution network in 1997 with two

fulfillmentcenters in seattled and new castledeal aware. Amazon has
several types of distribution facilities consisting of crossdockcenters,
fulfillmentcenters, sortation centers, delivery stations, Prime now hubs,
and Prime air hubs. There are 75 fulfillmentcenters and 25 sortation
centers with over 125,000 employees. Employees are responsible for
five basic tasks: unpacking and inspecting incoming goods; placing
goods in storage and recording their location; picking goods from their
computer recorded locations to make up an individual shipment; sorting
and packing orders; and shipping. A computer that records the location
of goods and maps out routes for pickers plays a key role: employees
carry hand-held computers which communicate with the central
computer and monitor their rate of progress. Some warehouses are
partially automated with systems built by amazon robotic .

How Amazon Is Changing Supply Chain Management

Amazon has changed the face of retail through its use of bold supply
chain strategies and the deployment of innovative technologies. The
online retailer's history is one of rapid growth and relentless innovations.
It's reshaping the supply chain and leaving competitors scrambling to
catch up.

 Rapid Growth

In 2004, 10 years after Amazon was founded, its annual revenue was
just under $7 billion. According to Statista, by 2018, revenue reached
almost $233 billion. In fact, Amazon is the fastest company to reach
$100 billion in sales revenue, taking only 20 years. From its inception,
Amazon has been growing approximately 20% per year. It grew by 30%
from 2018 to 2019. Currently, it enjoys more than 13% of gross global e-
commerce sales. Many believe Amazon is aiming for $1 trillion in yearly
revenue. If you take Amazon‘s 20% yearly growth rate into the
calculation, it should reach that goal by 2027.

55
Whether or not the company achieves that goal by then, its
transformation from a simple online bookseller to the most formidable
force in the retail industry is remarkable. One of the driving forces behind
that transformation is its innovative and highly efficient supply chain.
Amazon‘s continuous efforts to deliver products to the customers in the
shortest possible time are putting intense pressure on other retail
industry giants across the globe and thus changing the way supply chain
management works.

 Game-Changing Delivery Strategy

Back in 2005, Amazon launched its Amazon Prime service. By paying an

annual membership fee, customers received guaranteed two-day
shipping on hundreds of thousands of products. The introduction of two-
day delivery was the game-changer that established the dominance of
Amazon in the online retail industry. When many other retailers started
to catch up by offering their own free two-day shipping, Amazon tipped
the playing surface again by offering a one-hour delivery with its Amazon
Prime Now service (which it has since changed to a free two-hour
delivery).

The company has always made life difficult for its major competitors with
its innovative strategies.

Advanced Supply Chain Management Practices

Amazon enjoys a cult following. It is a favoritechoice for customers due

to one crucial reason: quick and efficient supply chain management. The
combination of sophisticatedinformation technology, an extensive
network of warehouses, multi-tier inventory management, and excellent
transportation makes Amazon‘s supply chain the most efficient among
all the major companies in the world. Those efficiencies have made the
current shop-from-home world possible.

Outsourcing Inventory Management and Insourcing Logistics

Amazon‘s supply chain heavily depends on the outsourcing of its
inventory management. Products that are infrequently ordered are not
stored in regular Amazon warehouses. It may come as a surprise to you
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that third-party sellers are behind nearly 82% of Amazon‘s sales. That
amounted to $42.75 billion in 2018.

Amazon‘s one-hour or same-day shipping is possible due to its

dependence on its own logistics. Amazon understands too well that
depending on third-party logistics to deliver these orders would just
lengthen the product delivery time. That‘s why Amazon mostly uses its
own delivery vehicles for same-day or one-hour delivery options.

Delivery options for customer

Amazon has different warehouses for different kinds of products and

customer preferences. Prime delivery, one-day delivery, first-class
delivery, and free super-saver delivery are some of the common delivery
options available to Amazon customers. Amazon‘s continuous efforts to
meet every customer's delivery preferences make it a logistics giant.

Push pull strategy for supply chain success

Amazon‘s own warehouses are strategically placed and stocked, moving

closer and closer to main metropolitan areas and city centers. As a
result, it uses a pure push strategy for the products it stores in its
warehouses, forecasting demand for the specific region. On the other
hand, it uses a pure pull strategy when it sells the products from third-
party sellers, using more of an order-by-order fulfillment model.

Classes and zones

Amazon boasts more than 75 fulfillmentcenters in North America and

greater than 125,000 full-time employees. To make good on increasingly
fast delivery promises, the company has positioned many new
warehouses in proximity to local urban markets. (Walmart's online
strategy in China now similarly makes use of a closer-to-the-customer
fulfillment model, operating a network of mini-warehouses.)

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The location, size, and number of warehouses are important factors in
Amazon‘s supply chain success. Its warehouses are divided into five
storage areas. Its library prime storage stores books and magazines.
Next, its pallet prime storage stores full-case products that have very
high demand. Next, case flow prime storage stores high-demand
products picked in less-than-case quantities. Its reverse storage
accommodates irregularly shaped and low-demand products. Finally, its
random storage area stores smaller, moderate-demand items.

Automation

In 2012, Amazon acquired a provider of automated and

robotic warehouse solutions called Kiva Systems. And in 2015, that
company was rebranded as Amazon Robotics. The robots of Amazon
Robotics can pick and pack without needing any human assistance,
enabling Amazon to complete warehouse activities incredibly quicky.
Amazon has increased its army of warehouse robots at a rate of

15,000 per year since 2015. As of January 2017, Amazon had more
than 45,000 warehouse robots and counting.

To date, Amazon‘s robotics have been aimed at bringing goods to

people for the picking of orders. The next generation of robots will see
them picking the orders on their own to reduce the need for human order
pickers.

While Amazon has been increasing its army of robots in its warehouses,
other online retailers were initially slow to follow. Now, however, robots
are catching on both domestically and abroad in large facilities and
smaller islands of automation within existing facilities. Autostore is an
example of a robotic automation provider that can accommodate such
islands of automation.

Supply chain cost

Due to the huge economies of scale and a bundle of industry-leading

supply chain strategies, Amazon has been able to keep its overall per

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unit supply cost to a bare minimum. As a result, it has been difficult for
other companies with far lower sales volumes and only their own
warehouses to compete.

Drones: The Supply Chain of the Future

In 2013, Amazon‘s CEO Jeff Bezos announced that his company was
developing a drone-based delivery system called Amazon Prime Air that
would be delivering products under five pounds in locations within
10 miles of Amazon‘s fulfillmentcenters within just 30 minutes or less.
There are, of course, many hurdles to overcome to realize this dream.
But Amazon is keeping at it. As of November 2017, it announced the
development of a drone that would self-destruct during flight, if required,
to keep people safe.

Research and regulatory compliance updates continue, but there is no

concrete date yet for the official flight of Amazon's drones. Still,
developing the drone-based delivery system is a major indicator that
Amazon is doing everything possible to leverage all of the latest supply
chain technologies to maintain its place as the clear market leader.

Manufacturing Sector

Amazon is not just a retail giant anymore. It now produces a wide variety
of products including batteries, backpacks, Bluetooth speakers, iPhone
chargers, dog poop bags and more. Its product manufacturing arsenal
continues to expand to include more and more categories.

Amazon understood that it could produce many of the third-party

products it is selling to customers at much lower prices. The company's
high volume naturally lends itself to low-cost production. As a result, the
manufacturing sector of Amazon is making it financially stronger while
grabbing market share from many manufacturing companies. This
manufacturing support for its retail operations provides Amazon with an
important revenue growth opportunity.

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The Bottom Line

The rate of Amazon‘s innovations in supply chain management has

been mesmerizing, making it difficult for lower-volume competitors to
keep up. Amazon is forcing its major competitors to invest more in
supply chain automation, lessen the overall product delivery time,
increase the number of warehouses, and even engage in product
manufacturing.

Its acquisition of Whole Foods is also a bold declaration of its move to

embrace brick-and-mortar retail, and further emphasizes the
convergence of traditional retail and e-commerce strategies. Most
importantly, Amazon‘s unique supply chain strategies and continuous
technological innovations have already changed the way supply chain
management works. With impending advances in robotics, drones, and
other autonomous vehicles, one can only guess what innovations are
next for Amazon.

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 Chapter 9
ARTICLES

ARTICLE-1

Amazon Faces A Crucible Moment With Employees

Amazon is at a crossroads. Amazon and CEO Jeff Bezos are facing

sharp criticism over their treatment of Amazon employees – and the way
the company responds to the objections may well determine its
future. The ordeal over Amazon‘s employee engagement can serve
either as the stumbling block that causes the company to stagnate and
perhaps even decline, or as a shot in the arm that refocuses and
reenergizes the organization.

Amazon Has Come Under Fire

Reports of unsafe working conditions at Amazon warehouses have

attracted widespread attention and many questions have been raised
about whether or not Amazon fired whistleblowerswho raised concerns
about the lack of protection for employees at the company:

 The news television show 60 Minutesrecently did a deep dive into

the matter.

 A single video from CNNon the topic has been viewed over
300,000 times on YouTube and received nearly 1,600 comments.

 A group of nine U.S. senators including five former presidential

candidates issued an open letter to CEO Jeff Bezos, seeking more
information about the recent employee firings.

 A blog post by Tim Bray, former vice president and Distinguished

Engineer at Amazon Web Services, explaining that he quit ―in

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 dismay‖ over the firings has received extensive coverage in the
news and social media.

 In response to the hailstorm of criticism, Amazon has enumerated

the actions it has taken to ensure workplace safety and support its
employees, including implementing over 150 significant process
changes, setting up testing stations in and regularly sanitizing its
locations, and increasing employee pay.
 The company has also announced that going forward it will
reinvest at least $4 billion into Covid-19 related expenses including
employee safety. It is unclear, though, how much of that spend will
be directed toward employee good vs. customer and business
growth efforts, such as developing consumer home testing kits for
the virus, optimizing a supply chain for pandemic supplies and
treatments, and investing in research for coronavirus vaccines and
therapies.

 It is also unclear whether the importance the company now seems

to be placing on its employees is in response to the negative
coverage and scrutiny, or if it truly reflects the company‘s
sentiments. Skeptics seem justified in questioning if Amazon truly
values its frontline employees and is invested in their wellbeing.
After all, before the pandemic Amazon had been accused of poor
working conditions and employee morale at the company‘s
warehouses.

Employee Engagement Matters to All Stakeholders

 The criticism aimed at Amazon matters because employee

engagement impacts customers‘ perceptions and purchase
decisions. Research by public relations firm Weber Shandwick has
shown that when consumers discuss companies, how they treat
employees is among their top five concerns. And in a report issued
by Edelman Intelligence, a global research firm, no single action by
a company is more interconnected with its ability to build trust with
the public than ―treating employees well.‖

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 The Covid-19 pandemic has heightened the priority customers put
on employee welfare. Researchers at Morning Consult
surveyed 2,200 American adults in March 2020 and found 67%
said it was very important that companies ―take care of their
employees and treat them well, even in tough times.‖ 53% agreed
with the statement ―I am more likely to purchase from companies
that treat their employees with flexibility and empathy.‖

 How Amazon treats its employees also matters because it impacts

the company‘s ability to retain existing employees and attract new
ones. Bray‘s departure from the company was a widely-publicized
example of the damaging effect that worker mistreatment can have
on other employees, but it‘s unlikely

to be the only consequence. A significant percentage of

warehouse employees currently choosing to stay home without
pay may decide not to return at all.

 Although Amazon has been hiring at record levels during the

global pandemic, adding 175,000 employees in the last two
months, this pace won‘t continue and the company will eventually
return to the same war for talent that many employers had been
fighting before Covid-19. Future potential employees will no doubt
be influenced by the broad news coverage during the
crisis. Beyond that, employer review sites such as Glassdoor and
Indeed and social media such as LinkedIn have created influential
platforms for employees to shape perceptions of companies
among prospective employees.

 Amazon‘s employee engagement also matters to investors. In last

week‘s shareholder meeting, participants pressed Bezos and other
Amazon representatives about the company‘s treatment of

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 employees. They also asked about the risk to the company‘s
reputation that the increased scrutiny into its workforce
management might cause. On the eve of the meeting, CtW
Investment Group, an organization that works with union-
sponsored pension funds that own nearly 900,000 Amazon shares,
convened hundreds of shareholders so they could hear directly
from warehouse workers.

Amazon’s Golden Opportunity

Despite all the trouble they‘ve caused the company, the crisis and
criticism present Amazon with an opportunity — to become the standard
bearer in employee engagement.

The charges against Amazon seem to have set the company back on its
heels and it‘s been operating from a defensive position for several
weeks now. It needs to get out in front of the concerns with substantive
changes, instead of issuing news releases like the one it produced in
advance of last week‘s shareholder meeting that looked like a news
story and promoted how Amazon is protecting employees. Instead of
creating canned videos of workers praising the company and touting its
safety measures, it should pursue ground-breaking solutions that
actually improve its workplaces and culture,

Now is the time for Amazon to demonstrate true leadership in the way it
engages its workforce. Some possible approaches include:

 Proactively involve frontline employees in problem-solving and

decision-making on workplace safety and employee engagement.
 Regularly survey employees and solicit feedback from them to
understand their needs and concerns – and communicate with
transparency to employees and other stakeholders about the
findings and plans for addressing them.

 Institute new measures of performance and definitions of

success for employees, and ensure alignment of expectations on
employees throughout the organization.
 Develop an integrated employee experience that addresses
their full range of needs – emotional, financial, social, and
physiological, in addition to safety.

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  Share employee engagement best practices with other
companies, reporting on progress as well as setbacks, as it has
previously done with new product failures such as the Fire Phone.

All the resourcefulness and passion – as well as superior operational

capabilities and vast resources – that has enabled Amazon to produce
so many ground-breaking innovations for customers should now be
directed toward employees. Bezos and his leadership team must see
Amazon‘s workforce not as an expensive drag on the company‘s
profitability, but as an energizing flywheel that propels its productivity.

In other words, if Amazon wants to remain ―customer-obsessed,‖ it must

also become employee-obsessed.

ARTICLE-2

Amazon in talks to buy $2 billion stake in Bharti Airtel - sources

Amazon.com is in early-stage talks to buy a stake worth at least $2

billion in mobile operator Bharti Airtel, three people with knowledge of
the discussions told Reuters, in a move that could turbocharge India's
digital economy.

65
The planned investment, if completed, would mean Amazon acquiring a
roughly 5% stake based on the current market value of Bharti and would
give India's third-largest telecoms company a boost as it seeks to
compete against the number one player Reliance Jio.

"Jio has transformed itself from a pure mobile operator to a digital

technology-led consumer facing platform, and Airtel can do the same,"
said one of the people.

"Airtel is looking to play a catch-up game here, and for Amazon it makes
all the strategic directional sense for the India business."
Amazon had been mulling several investment options, including buying
a stake worth up to 8-10%, a second person said.
The talks between Bharti and Amazon are at an early stage and the deal
terms could change, or an agreement may not be reached, said two of
the three people, all of whom declined to be identified because the
discussions are confidential.
If talks to buy a stake fail, the companies could also look at a commercial
transaction that could give Bharti's customers cheap access to Amazon
products, one of the people said.

An Amazon spokeswoman said the company does "not offer comments

on speculation of what we may or may not do in future."
Bharti said they routinely work with all digital players to bring their
products, content and services to customers. "Beyond that there is no
other activity to report," it said in a statement.
Amazon counts India as a crucial growth market where it has committed
$6.5 billion in investments mainly toward expanding its e-commerce
footprint.

The Seattle-based company has also expanded its digital offerings in

India via its voice-activated speakers, video streaming and cloud
storage, as it seeks to tap a rising number of internet and smartphone
users in the country of 1.3 billion people.

66
A deal with Bharti could help Amazon expand offerings via its smart
speakers and also boost its cloud business as access to Bharti's vast
telecom fibre network could help Amazon lower costs. Reliance's Jio has
already partnered with Microsoft for use of its Azure cloud platform.

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 Chapter 10
THE ETHICAL ISSUE WITH AMAZON

At this point , we‘ve all heard something shady about Amazon. A hint of
unethical practice, a stray article about something in their warehouses.
But when a mega-corporation starts to become pervasive and ever
present in our daily lives it‘s hard to imagine an alternative. Amazon has
reached such a height that for many it may seem like a necessary evil in
modern society, and it can almost seem fruitless to learn why they are
problematic. If it‘s unavoidable, better to not know just how bad it is.

But here’s the thing: for some of us, Amazon is avoidable.

Amazon thrives off convenience and low prices, meaning that for certain
members of society it really can function as a valuable tool due to their
lack of income or time outside of work, both larger systemic problems
that need to be addressed in their own right. But for many of us it‘s not
necessary for our daily lives. It just isn‘t. now gone for nearly two years
without buying anything from Amazon, including digital purchases like
Prime, Kindle or Audible and, while some of this is due to my own
privilege and living about 5 minutes away from my local high street, it
has been achievable.

Beyond questioning the ethics of a business that does best in a hyper-

consumerist and unsustainable environment, when you start to look into
it properly it seems like nearly everyone who works at Amazon is having
a terrible time. there are some terrible sources are as follow :

Tax avoidable
Taxes are important. And when the ultra wealthy aren‘t paying them,
they‘re even more important. Taxes redistribute money in such a way
that all citizens can receive the services they need (such as education
and healthcare), addressing issues like poverty and income inequality by
making sure our most vulnerable are able to have their needs met for
free. When high earners, or big business, don‘t pay their taxes it means

68
there‘s less to go around for everyone, and it‘s the vulnerable who end
up being hurt. Unfortunately not paying taxes is also what corporations
apparently love to do (including the ones you think may be ethical, more
info on Ecover‘s tax avoidance here).

One serial tax avoider is Amazon. In fact it was avoiding tax that got
them where they are in the first place. Founded in Seattle by Jeff Bezos
in 1994, Amazon was created to exploit the loophole of not having to
collect sales taxes when selling online, which at the time was only a
requirement for physical stores. Although in the US Amazon now does
pay sales tax in every state that has one, calculations suggest that if
Amazon had been paying taxes from the start it would have paid a total
of $20.4 billion in sales taxes from its founding until 2015.
In the US Amazon also barely pays any federal income tax, both through
avoiding booking any profits for years, instead investing everything back
into the business, and through aggressive tax planning. According
to Matthew Gardner at the Institute on Taxation and Economic
PolicyAmazon paid no federal tax on $5.6 billion in U.S. profits, and in
the past five years paid a rate of 11.4% on its profits of $8.2 billion,
around a third of what they should pay.

Beyond this, Amazon is also adept when it comes to playing state and
local governments against each other, demanding large subsidies in
order to set up an Amazon facility in their area. Good Jobs estimates
that Amazon has received at least $1.6 billion in tax incentives, many of
which are given in the hope that Amazon‘s presence will result in an
economic boom and job opportunities in the area. Research suggests,
however, that this doesn‘t work. There is no return on investment for
local areas, in fact it‘s a huge waste of money. Employment remains
stagnant after Amazon moves in, and economic development doesn‘t
materialise by incentivising big businesses. Amazon just gets to avoid
paying more taxes.
Across the pond in the UK Amazon only paid £4.6 million in taxes in
2017, by routing sales through Luxembourg, a well known tax haven.
Almost 75% of Amazon‘s 2017 UK revenue, amounting to £6.88bn of UK
sales, was registered through their Luxembourg subsidiary. These
numbers suggest that Amazon‘s tax rate ended up at 0.5%, leaving £50
million of tax unaccounted for. In October 2017 the European
Commission also ruled that Luxembourg had improperly allowed
Amazon to evade taxes on around 75% of its European profits, and
ordered Luxembourg to recover $250 million plus interest from Amazon.
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Warehouse Abuses

Amazon‘s fulfillmentcenter wages are, generally speaking, lower than

the average wages for warehouse employees elsewhere. ―The average
warehouse worker at Walmart makes just under $40,000 annually, while
at Amazon would take home about $24,300 a year,‖ CNN reported in
2013. ―That‘s less than $1,000 above the official federal poverty line for
a family of four.‖
A November 2016 study by the Institute for Local Self Reliance, a
community development advocacy group, analyzed more than 1,300
wage postings on Glassdoor and found that positions at Amazon‘s
fulfillmentcenters paid about 9

percent less than the industry average. And when the researchers
homed in on 11 major metro areas to account for differences in cost of
living, they found that Amazon‘s wage dip was even more pronounced:
The company was paying 15 percent less than comparable positions in
each area. A January 2018 study by The Economist using different
methods found similar results.

While Amazon did announce in 2018 that it would finally be raising

wages for warehouse workers, there are still many issues for those who
take these jobs.
If you‘ve heard something bad about Amazon it‘s usually to do with their
warehouses, where employees pick and pack products for delivery.
There are multiple accounts of abuses at various Amazon warehouses,
both in the UK and America, but certain details seem to appear again
and again.

Multiple reports can be found of employees pushed to meet extremely

high targets, subjected to strict breaks and a terrifying work
environment, monitored electronically, and worried that not meeting
targets will result in immediately losing their jobs. People talk
about peeing in bottles out of fear of being disciplined or terminated for
‗wasting time‘ going to the toilet, to the point where
employees deliberately decide not to drink water so they don‘t have to
pee while working. One employee became sick while pregnant and was
given a warning, one was hospitalised after having an epileptic

70
seizure at work and received a strike for not showing up the next day,
another turned up for work with gastric bug, had to go home after two
hours and was given a strike despite getting a sick note from their
doctor. One woman tragically suffered a miscarriage while working,
which she believed was ‗partly as a result of continuous pressure to hit
targets‘.
In UK warehouses there are also records of increased depression,
anxiety, and suicidal thoughts in employees, alongside bullying and
harassment.

The links between Amazon warehouses and ill health is sadly not
new. In 2011 staff in a Pennsylvania warehouse worked in 100-degree
heat with ambulances waiting outside, taking away workers as they fell.
In the UK a 2018 Freedom of Information request revealed
that ambulances had been called out 600 times to Amazon‘s UK
warehouses in the previous three years. The request showed 115 call-
outs to Amazon‘s site in Rugeley, near Birmingham, in comparison to
only 8 calls to a nearby Tesco warehouse of a similar size.

In its first two and a half years of operation, more than 180 calls were

placed to 911, many of them for patients in their 20s and 30s. The most

common issues cited were difficulty breathing, chest pains, cardiac

problems, spells of unconsciousness

or other undefined illnesses. The frequency of calls tended to climb

during peak season.

And, heartbreakingly, in 2018 The Huffington Post reported on the case

of Jeff Lockhart Jr. In 2013 Jeff, an employee at Amazon‘s warehouse in
Chester, Virginia, collapsed at work and was pronounced dead less than
two hours later. His autopsy cited heart problems as the cause of death,
and it‘s impossible to know whether the exertion or intensity of the job
was a contributing factor. What we do know, however, is that a public
records request revealed the following about the Chester warehouse:
Beyond suggesting a correlation that can‘t be definitively proved, we
also know that Jeff‘s wife and children were left vulnerable. Jeff was

71
employed as a temporary worker at Amazon, meaning he had no life
insurance or health insurance through his workplace. When he died, the
family received nothing.

Exploitation of temporary workers

Jeff‘s situation was not a unique one. Amazon warehouses are often
staffed by numerous temps hired by external companies who Amazon
outsource to. Some of these temps, like Jeff, are hired for the extra work
created around the holidays, known as ‗peak season‘, and let go shortly
after with minimal notice. Some are kept on, as Jeff was, and some are
brought in as temps outside of that season altogether. The idea is that
eventually these temps should graduate to proper employee status,
which will provide more security, better pay and benefits, however there
seems to be no proper protocol for how this happens. Jeff had died in
January, well after peak season had ended and confident that he would
become permanent staff, but there was nothing to indicate if or when this
would happen. A separate report talks about other warehouses where
no one had been made permanent for 6 months and two years
respectively, and past temps from Jeff‘s warehouse emphasised that
there was no guarantee he would ever have become a permanent
employee. It seems this is a common pattern of behaviour for more than
one Amazon warehouse (although not necessarily all of them).

A toxic environment for white collar workers

Outside of blue collar jobs Amazon treats its office staff pretty terribly

too. In 2015 The New York Times released a lengthy report on the

workplace culture at Amazon‘s Seattle offices, and it makes for intense

reading.

Interviews with over 100 current and former employees paint a picture of
an environment of ‗unreasonably high‘ standards and ridiculous working
hours (the report details emails arriving after midnight then text
messages asking why they weren‘t answered, ‗marathon‘ conference

72
calls on Easter Sunday and Thanksgiving, criticism from bosses when
they can‘t reach employees on vacation, and working at home on nights
and weekends). Being ‗vocally self-critical‘ is described in the leadership
principles, workloads are described as ‗extreme‘ by employees who
used to work on Wall Street, and several fathers talked about leaving as
they felt pressure from colleagues and bosses to spend less time with
their families. Employees were also often convinced they‘d be replaced
with younger staff members who could put in more hours. The New York
Times interviewed one former employee, a father of two, who wondered
whether Amazon would bring in younger workers with fewer
commitments. He was 25 himself.

The report also talks about regular meetings known as ‗business

reviews‘. In these meetings employees were expected to memorise print
outs given to them a day or two before, sometimes up to 60 pages long,
of data on which they are cold-called and pop-quizzed about. Workers
are also culled annually. The entire workforce is evaluated, ranked from
best to worst, and the bottom performers lose their jobs. Some workers
who suffered from personal crises felt they were evaluated unfairly or
edged out instead of being allowed to recover. Multiple interviewees
described returning from cancer treatment and subsequently receiving
low performance ratings and being told their personal life was interfering
with their work. Employees returning after serious surgeries and
miscarriages were put on performance improvement plans and
monitored to ensure their focus stayed on their job. One woman
received low ratings after cutting back working nights and weekends to
care for her dying father. Another who miscarried twins had to go on a
business trip the day after her surgery because she was told the work
still needed to be done

Finally, the report also drew a connection between Amazon‘s leadership

principles, its job elimination system and its gender gap (the list of
officers is comprised of 6 white men and and 1 white woman). Several
former and current high level female executives talked about how
intangible criteria like ‗earn trust‘ or the encouragement to regularly
disagree with colleagues worked to their disadvantage, as being a
forceful woman often doesn‘t go down too well in the workplace, instead
leading women to be deemed ‗unlikeable‘.
It seems that Amazon has a tendency to rely on data driven methods
and analysis for running its operations, but this approach ultimately
results in dehumanising employees and disregarding other factors at
play, such as race and gender, that unconsciously affect the way

73
business is conducted. This all points to an unfairly weighted, and
seemingly awful, place to work. The report also details how many
employees don‘t last long at Amazon, and jump ship to other
organisations such as Google and Facebook.

Exploiting those who sell on Amazon & those who buy

Not content with hurting just about everyone it employs, Amazon also
finds a way to hurt those who sell on their platform and those who buy
on it. Research by ProPublica found that Amazon‘s algorithm is built in a
specific way so that when customers search for something they‘re
directed towards products from Amazon or sellers who pay for Amazon‘s
services, even when these items are significantly more expensive than
other competitors selling on the site.

Amazon ranks products by price + shipping, but conveniently omits

shipping costs for its own products or those sold by companies that pay
Amazon. As competition gets more and more aggressive sellers are
forced to join the ―Fulfilled by Amazon‖ programme, which requires
paying Amazon to warehouse and ship their products, as it increases
their chances of winning the buy box. The fees for the program can
amount to between 10 – 20% of sales, meaning that smaller businesses
lose money and customers are exploited.

Additionally, when certain products sell well Amazon has also been
known to use this data in order to remove any third party sellers from
their website, become the only sellers of that product and then raise
prices on it, using their own software to leverage monopoly power and
earn more money.

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 Chapter 11
DATA INTERPRETATION

The researcher surveyed 100 respondents through the medium of online

google form.Since the chosen medium of survey was online, more
respondents belonging to different locations and backgrounds were
covered. Following are the questions from the form and the analysis of
the data collected from the surveys.

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ANALYSIS:
The above two pie chart represent the age and gender of the people
who responded to the researcher‘s survey of consumer satisfaction of
Amazon. In the age section it is evidence that age is between 70.3% are
18-25 and 18.8% are 25-40 and 10.9% are above 40 respectively.
While we can also noticed that the researcher was successful enough to
get responses of both genders males are 61.4% and females are 37.6%
and others are 1%.

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From the collector responses the researcher observed that above 72.3%
are familiar website and 16.8% are not familiar website and 10.9% are
others.

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According to the above data the researcher find that the 78%
respondent have installed in their device and remaining 22% have not
installed.

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According to above data the researcher find that 32.7% respondent uses
amazon app everyday on everyday basis and 67.3% uses once in while.

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According to above data the researcher find that 79.2% respondent find
amazon easy to navigate where‘s other‘s 20.8% are did not find amazon
easy to navigate

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According to above data the researcher find that 83.2% respondent uses
shopping for amazon and other 16.8% are did not uses amazon website
for shopping.

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According to above data the researcher find that 80.2% respondent are
not satisfied with the selection of goods available at amazon and other
19.8% are dissatisfied with the selection of good available at amazon

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According to above data the researcher find that 49.5% respondent are
satisfied with the product pricing available at amazon and other 24.8%
are dissatisfied product pricing available at amazon and others 25.7%
are neither satisfied nor dissatisfied.

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According to above data the researcher find that 82.2% respondent feel
safe while browsing on amazon and other 17.8% did not find amazon
safe to browser.

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According to above data the researcher find that 63.4% respondent are
satisfied with the quality of products are available at amazon and 10.9%
are dissatisfied with the quality of products are available at amazon and
others 25.7% are neither satisfied nor dissatisfied.

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According to above data the researcher find that 63.4% respondent feel
amazon‘s brand image as good and other 36.6% feel amazon‘s brand
image as average.

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According to above data the researcher find that 42.6% respondent are
find amazon CRM very good and 37.6% feels amazon CRM as good
and others 19.8% are feels average.

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According to above data the researcher find that 55.4% respondent are
recommend to others and 21.8% are not and others 22.8% are
recommended or nor.

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According to above data the researcher find that 63.4% respondent feel
amazon‘s brand image as good and other 36.6% feel amazon‘s brand
image as average.

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According to above data the researcher find that 51.5% respondent uses
amazon pay for payments and other 48.5% did not use for amazon pay
for payments.

90
According to above data the researcher find that 53.5% respondent are
feels comfortable for payments and 27.7% are not comfortable to
making payments and others 18.8% are neither feel safe or nor.

91
According to above data the researcher find that 57.4% respondent are
assumed that amazon gives best offer and deals and 24.8% are not
assumed that amazon gives best offer and deals and others 17.8% does
not tink amazon gives best offer nor deals

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According to above data the researcher find that 12.9% people give
rating 1 & 11.9% people give rating 2 & 22.8% people give rating 3 &
26.7% people give rating 4 & 25.7% people give rating 5.

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According to above data the researcher find that 75.2% respondent feels
amazon is better and other 24.8% did not feels better.

94
According to above data the researcher find that 37.6% respondent are
very much satisfied with the accuracy of their order and 50.5% are just
satisfied with the accuracy of their order and others 11.9% are
dissatisfied.

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According to above data the researcher find that 64.4% respondent
saying yes and other 35.6% saying no.

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According to above data the researcher find that 5% people satisfied to
give rating 1 & 10.9% people satisfied to give rating 2 & 7.9% people
satisfied to give rating 3 &
24.8% people satisfied to give rating 4 & 27.7% people satisfied to give
rating 5.

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 Conclusion

Amazon is an American international e-commerce company. It was

started by Jeffrey P. Bezos in the year 1994. And it was launched in
India in June 2013. Three years back, Amazon had no infrastructure in
India, and now it dominates the Indian markets. So the objective of the
is to study the challenges faced by Amazon during initial years and
what strategy it followed to overcome the challenges. And there is also
study the Business Models of Amazon . Fact behind formation of
Amazon in India was its huge number of headcounts i.e. 1.25 billion four
times as big as the U.S.‘s and more than doubles Europe‘s. Of
these, 500 million, around 35 percent, are internet users. As per
researches the yearly growth rate of internet users is highest in India
around six million users join every month. Researchers expect the
online shopping market in India to reach $15 billion by 2016 up from only
$35 million in 2014. Amazon is known for knowledgeable products.

Amazon under the leadership of Jeff Bezos, passed the three tests of a
winning strategy. First, its consumer-centric focus is providing the
company with the strategy to address the need to widen its market base.
With consumers its mind, the company made it cost-effective, simple,
and convenient for consumers to purchase products online through
strategic alliances and technological innovation.Second, the strategy is a
fit to Amazon‘s position in the online retail industry. The company is
beset with competition from a saturated retail market, where it rivals with
more established retail companies such as Wal-Mart or Target. As the
first-mover in the e-commerce industry, Amazon was able to get a head
start and perfected online purchasing to make it not only convenient, but
also reliable and secure

There are also indicate a recent articles of 2020 where the first is crucial
moment with employees. and Amazon reportedly considering $2 billion
stake in India telecom operator BhartiAirtel.
Amazon is an arch tax avoider and is the subject of global boycott call by
ethical consumer.

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 BIBLOGRAPHY

THE CONTENT OF INFORMATION IS TAKEN BY THIS SITES

https://www.amazon.in
https://www.customer.com
https://www.innovation.com
https://www.digitalcommerce360.com
https://www.forbes.com
https://www.livemint.com
https://www.onezero.medium.com
https://www.chainstorage.com
https://www.strategicmanagementinsight.com
https://www.selbrite.com
https://www.tech.economictimes.indiatimes.com
https://www.ethicalunicorn.com

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