Amazon's strategic competitive advantages in e-commerce and cloud services

¶ … history of amazon and a comparison to its major rival eBay.

History of Amazon

Started by Jeff Bezos in 1994, Amazon is a multinational electronic commerce company that is headquartered In Seattle, Washington DC, USA. The company also provides cloud computing servicers and produced the widely popular Amazon Kindle e-book reader and Kindle Fire tablet computer. It has separate retail websites for United States, Canada, United Kingdom, France, Germany, Italy, Spain, Japan, and China, and plans to open other sites for further countries that include Poland, Brazil, Netherlands and Sweden.

Amazon.com was called after the largest river -- the Amazon River and after the Amazon gods for a purpose: it planned to become to the largest online retailer -- and succeeded (Jopson, 2011). Bezos, too, chose a name that would appear as first of the alphabet in order to make it easy to track in a web search (Byers, 2006). The name 'Amazon' was exotic and different and its letter A was a replica of Bezos' dream: that the company would produce everything beginning from A to Z. The intent of the company was portrayed in its logo (created in 2000) - a smile forming from A to Z, the manifestation of thorough customer satisfaction.

Amazon was not always known as such. In the beginning, it was simply named Cadabra and was renamed Amazon when it went online the year after it was founded, in July 1995. Its first book sold was Hofstadter's Fluid Concepts and Creative Analogies . The company introduced its presence to the public in October 1995; was reincorporated in Delaware in 1996; and offered its tock in 1997 for $18.00 per share.

Amazon was spurred on by Bezos' regret that he had not made something of the Internet gold rush whilst it had lasted (Time Magazine, 1999). Ironically, Amazon became far more than that making Bezos "the man of the year" in Time magazine, 1999 and calling itself the world's largest bookstore -- an accolade that impelled a court suit from Barnes and Nobles.

Bezos was an inveterate entrepreneur. Starting off slowly, Amazon (like the River that it is called after) started off with a trickle leading observers to believe that it was bound to fail. The dot.com bubble put many competitors out of business, but Amazon persevered winding its way cautiously and resolutely through the changes, producing its first profit in the first quarter of 2001 (Spector 2002). Then, it swelled.

Today, Amazon has succeeded to the point that it has diversified into selling many more items that include DVDs, CDs, MP3 downloads, software, video games, electronics, apparel, furniture, food, toys, and jewelry.

Comparison to E-Bay

E-bay is Amazon's largest competitor but differences are many. There are actually at least 12 points of comparison between the two:

1. Fees -- E-bay requires that the buyer pays for every item listed whether or not it sells, whereas Amazon requires no fees for listing but its PayPal fees are exorbitant.

2. Auction vs. fixed-price listings. Amazon has only fixed-price listings; e-Bay showcases both.

3. Stability -- Amazon produces few changes as opposed to eBay that produces changes as needed.

4. Feedback -- customer feedback effects ranking on eBay. Amazon, on the other hand, does not order its ranking according to customer feedback, although its provides this feedback.

5. Branding -- as opposed to Amazon, eBay allows customer to brand product and crate a unique presence.

6. Photographs -- eBay, as opposed to Amazon requests photographs for its featured items.

7. Taxes - EBay, as opposed to Amazon has a protocol for collecting taxes.

8. Average sales price -- eBay customers wait for the 'right price' to appear on a certain item. Amazon, in contrast, pays the given price.

9. Payment methods are the same for both companies: PayPal, money orders, cashier's checks, or cash (in person).

10. Return Policy - the eBay seller can use dispute resolution. Amazon, on the other hand, as an obligatory return policy.