Through This Simple Assessment

By Amy Wise

While worrying about how to operate more efficiently, Amazon sells to outside companies the rights to use its operations and distribution centers. Amazon partners with Borders Books & Music and its borders division to provide borders with inventory, fulfillment of orders, and handling of its customer service. Amazon receives revenu

• Language: English
• Publisher: Amy Wise
• Release date: Feb 1, 2024
• ISBN: 9798869208934

Book preview

Through This Simple Assessment

Through This Simple Assessment

Copyright © 2023 by Amy Wise

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : COMPLETE DISTRIBUTION

CHAPTER 2 : IN WHAT MAKES ME FEEL EXTREMELY

CHAPTER 3 : CONNECTING VIETNAMESE PEOPLE!

CHAPTER 4 : COUNTRIES THAT HOLD GOLD

CHAPTER 5 : HIS SENIOR ADVISORS REACHED THE

CHAPTER 1 : COMPLETE DISTRIBUTION

Amazon has created one of the best Web experiences and has the most comprehensive customer service and distribution system in the American retail industry – most of it built from scratch. No. It's surprising that Amazon is still running that system and trying to figure out how to take advantage of the increased efficiency at the million-square-foot networks of distribution centers where Amazon picks, packs and ships millions of items. different goods, to millions of different people every day.

The system is too inefficient. Jeff Wilke, who was hired in the fall of 2000 as Amazon's new chief executive, told Business Week's Margaret Popper that he was surprised by the haphazard state of organization he took over. Defective products lie in piles on many store shelves. Deliveries of this or that product – a whole truckload of kitchen knives, for example – appear mysteriously and languish in warehouses. No one knows what to do and who is responsible. We keep everything – just keep it like that, – Wilke was shocked. We put it on the shelf and said, 'I don't know, the most important thing is the customer.'

No wonder Lauren Levitan, an analyst at Robertson Stephens, said: The more I see about the bullshit they have done, the more I believe there is room for growth.

Amazon  opened too many warehouses for phenomenal growth that never materialized. On January 30, 2001, Amazon announced that it was closing one of its five distribution centers in McDonough, Georgia and that it was reducing it to the Seattle DC area for the shopping season only. We overbuilt a little bit, Bezos admits.

At the same time, Amazon fired 1,300 people, accounting for about 15% of its entire workforce. That number includes 850 people in Seattle, many in customer service. The laid off employees were asked to transfer to existing call centers in Grand Forks, North Dakota and Huntington, West Virginia. It must be said that not many people take the job. A few months later, Amazon canceled a $40 million plan to build a 75,000-square-foot annex that would double the size of its headquarters on Beacon Hill, Seattle. The company also began subleasing several blocks of office space in a building in another part of the city. Those moves acknowledge the slowing growth of Amazon  – and the Internet retail industry in general – giving back much-needed space.

To appear serious in its efforts to become more efficient and profitable, Amazon agreed to ask Saul Hansell, the money and business columnist for the New York Times, to spend three and a half days observing the business. Dozens of meetings on inventory management, pricing and customer service. It's a memorable, painful and startling look at a company that's reinventing itself for efficiency. Hansell writes that he saw "a company struggling in every way to turn growth into profits. Many of the decision-making meetings in the first week of May focused on coping with the flood of data from a new accounting system that, for the first time, calculates earnings and losses on each product sold. The system considers a company's costs for shipping, regular sales, and 47 other factors

The results were truly unimaginable. More than 10% of products sold from electronics, kitchen and appliances are at a loss; 5% are books, music and video products – and that's where they make their money. As a result, Amazon tries to improve packaging, find better deals with sellers, and raise prices or eliminate money-losing items. One product that was eliminated was the candle holder, which is a large glass bowl filled with ice and filled with water to make the candle float. One frustrated customer sent candle holders back to Amazon four times because rocks broke the glass each time.

Jeff made a surprising claim in the Times that even inefficiency was part of the plan. We have been decisive and decided to build lots, although we hope to only build a few lots. If we hadn't done that, we would have disappointed our customers like many Internet companies, and we wouldn't have been able to survive.

You know Amazon is serious about efficiency when it does the unthinkable: it starts outsourcing storage and shipping of certain products like books and personal computers. After years of trying to negotiate with other publishers and sellers to sell directly to it, and cut out the middleman – Amazon figured it could reduce costs by buying a portion of its books from publishers. distributors are more capital efficient than many publishers. Every time we touch a product, we're ineffective, Lyn Blake, Amazon's vice president of purchasing, told a group of stock analysts.

In June 2001, Amazon arranged with major distributor Ingram Book Company to ship some books to Amazon customers, a move that would halve package delivery costs and reduce storage costs.

While worrying about how to operate more efficiently, Amazon sells to outside companies the rights to use its operations and distribution centers. Amazon partners with Borders Books & Music and its borders  division to provide borders  with inventory, fulfillment of orders, and handling of its customer service. Amazon receives revenue from borders 's total sales and pays borders a commission. A Web site called Borders associated with Amazon was launched in August 2001, allowing Web site customers to access Amazon's listings, select books, music, videos and digital video discs, and it also Get information about the locations of Borders stores and the calendar of events at the stores. Borders ranked third in the online book market with 27 million USD sold last year, behind Amazon (1.7 billion USD) and barnsandnoble  (320 million USD). The deal is more symbolic than money for Amazon, but it pleases Wall Street that was urging it to partner with a traditional reinforced concrete company. Amazon entered into a similar agreement with UK-based Circuit City bookstore Waterstones (which sells electronics), and the stores carry a variety of products.

WHERE ELSE WILL THE MONEY COME FROM?

To find ways to earn more revenue, Amazon  sells products based on downloadable information in a physical form that can be picked, packaged, and shipped. Benzos dubs these new things digital delivery. In addition to downloading music, e-books and software, the company also opened an electronic resource store to sell digital texts of market investment research, articles, and reference materials. and magazine articles and reports produced by Accenture, CIBC World Markets Corp., Harvard Business Review and many others on topics ranging from marketing strategy and e-commerce to computer programming , telecommunications – information. If successful, Amazon will expand similar offerings to the law, medicine, education, entertainment and travel industries.

Amazon also owns some very valuable data about the 30 million people who have purchased from the Web site. In 2000, Amazon struck a deal with MGM to promote the romantic comedy Give Me Back by sending free movie tickets to Amazon  customers who rented the film. This exposed to the public Amazon's ability to exploit data and then sell it to other companies, a practice that earned it harsh criticism from privacy lawyers, one of whom was Electronic Privacy Information Center, has ended its book-selling partnership with Amazon.

A college friend of mine, Barry Lafer, president of Lafer Management Corp., an investment management firm in New York, has long wondered how Jeff Bezos can ever get away. every three months. A perfect example of this is the announcement in July 2001 – at the same time that the so-so financial numbers were released – that AOL invested $100 million in the purchase of 6.54 million shares of Amazon common stock. at a price per share of $15.28. The agreement requires Amazon to promote AOL as its exclusive Internet provider, allowing customers to download AOL services from the Amazon  Web site. Amazon promotes an online store offering a variety of AOL Time Warner products and services, including the purchase of additional subscription services. In turn, AOL's technology was incorporated into AOL's Web-based shopping channels, such as Shop@AOL, AOL , CompuServe and Netscape . AOL and Amazon already have advertising partnerships, through which its products are cross-promoted through these channels. Amazon's technology includes its own personalized content, customer product reviews and ratings, and recommendations based on previous consumer purchases. AOL pays to promote its Internet service and other AOL products to Amazon customers.

It will be interesting to see these agreements succeed because there are so many obvious antagonisms. First of all, Amazon cannot sell books on AOL when the company has an exclusive agreement with Barneandnoble . AOL works closely with eBay, which has added new products to its features at the same time Amazon has expanded its catalog of used goods. (Amazon's sales of used products come from only a 15% commission, not from the full value of the item. Because its costs for those orders are minimal, Amazon claims The profit statement is the same, regardless of whether the product sold is new or used. Used books are currently discounted by 8% on all Amazon shipments).

IS THERE A TOMORROW?

The inevitable pressing question: Will Amazon  pull through?

Look on the bright side: It offers the best shopping experience on the Web with a great catalog, convenience, ease of use, competitive prices, key product information and of course customer service. Not impeccably. No pure Web retailer provides a better customer service experience and no Web retailer is better at customizing the Web site and its features for individual customers. Many of its competitors are buried deep in the dot com graveyard, while Amazon, as these words are written, still has money in the bank.

The company appears to know how to put together effective and ultimately profitable actions. If Amazon finds a way to use its share of distribution capacity, it can better control costs. It is estimated that Amazon's distribution costs (including transportation) account for 14 to 16% of revenue. If it cut it in half, Amazon could achieve a net profit of 7 to 10% – comparable to the average retailer's revenue by category. However, that tiny piece of profit forces us to answer the question: How much ink has been spilled because of stories about Amazon  (including the ink what you are reading) aimed at just one company making money? Same level of money and capabilities as Sharoer Image or Eddie Bauer? Maybe.

Besides, Amazon  is in the top 50 most recognized brands in the world - a surprising feat for a young company with small sales compared to the world's largest retailers. After all, Amazon  is only the 93rd largest retailer in the US, according to the National Retail Association. At the time I write these lines, it has about 30 million users in 150 countries.

Regarding the negative aspect on the books, the company has nearly 2 billion in debt. By mid-2001, a third of the 30 million consumers had not made any purchases in the previous 12 months. International activities are generally unprofitable. Amazon's mainstays of books, music and video are slowing, and business-to-consumer spending on the Web is up across the board, according to Forrester Search. Bezos himself told an audience of booksellers at Book Expo America in June 2000 that in 10 years, only about 15% of sales took place online. The real world is still the best method ever invented, – he told the audience. We are a species that likes to follow each other.

And who knows if the attacks on the World Trade Center on September 11, 2001 will impact people's shopping habits?

Can Amazon  be successful and profitable selling products other than books, music, and videos? Our new businesses are catching up with life, they will be accepted. You know, Nordstrom started as a shoe seller, Bezos said, forgetting the fact that Nordstrom sold shoes 65 years ago when it expanded into selling clothes and apparel.

If any of you are convinced of the conclusion that Amazon  will survive, the question remains: What kind of company will it be? Will it be an independent Wal-Mart-style Internet retailer or will it become a division of AOL Time Warner or a services company that handles Web transactions for other companies?

After researching and following this company for three years, I have a feeling Amazon  will continue to exist in some form – but not the form we see today. I think the latter company will also be acquired by another firm that transmits practical discipline and elementary management principles, and does not hesitate to correct costly mistakes of the past. Reasonable candidates are AOL Time Warner, Microsoft, or Wal–Mart. (So many rumors arose in 2001).

Amazon  has earned the title of most important and influential e-commerce business in history. It should be welcomed as a company that has brought technological excellence, unrivaled user customization, and millions of new users to the global network. And Jeffrey