Amazon: The most popular online retailer

When the internet became available to the public, a path was paved for online shopping. Some of the main reasons for the rapid growth of online shopping were the swift adoption of smartphones, easy access to technology, and the convenience of shopping wherever and whenever you wish.

One of the first shopping sites to start selling products online was Amazon. Thousands of companies have followed since. It is not news that Amazon is one of the best-known brands in history. But how did it start and how became what it is today?

History

Amazon was launched in 1994 when Jeff Bezos and his wife started their business as an online book store. So it all started with books: Since books were easy to receive, pack and ship, it made sense that they could compete by offering an affordable and convenient product.

Bezos took advantage of Seattle’s reputation as a tech hub and funded the company with $10,000 of his own money. Although Amazon is not the original name of the company, Jeff Bezos chose it because he envisioned his company being the largest online retailer, just as Amazon is the largest river in the world.

The company was successful enough to go public in 1996. When it entered the stock market, Amazon was valued at $300 million. At that time, the company also announced that it would invest more in technology and marketing to stay competitive in the market.

In 1998 Amazon added CDs and DVDs to its products list. The company started allowing other merchants to use its platform for selling goods in 1999. The next major product that Amazon started to offer was clothing in 2002 through partnerships with several major apparel brands.

In addition to these technological achievements that have changed the way customers research and purchase products, the company has acquired numerous other businesses throughout its history, bringing its technology and products to the expanded Amazon. Over the past 25 years, Amazon has become a commercial giant that connects consumers with the products they want and businesses with the customers they need.

COVID-19 pandemic: Profitable period for Amazon

Even before the COVID-19 pandemic, small businesses and stores had already started struggling to compete with electronic commerce (e-commerce) enterprises. When COVID-19 forced people to stay at home and physical stores to close, online shops, especially Amazon, were in a great position to profit.

Profits at Amazon have increased significantly since the pandemic began. In the first nine months of 2020, the company reported a 70% increase in earnings which is equal to $5.8 billion, compared to the same period in 2019.

According to a New York Times investigation, Amazon recorded a near 200-percent rise in profits as a result of North America’s swift shift to exclusively online shopping. Sales also increased annually by 37% to $96.1 billion.

The pandemic boosted not only the company’s profits but also its expansion. Amazon expanded its fulfillment infrastructure by 50% in 2020, involving more than 250,000 new employees in the process. It now has more than one million employees worldwide for the first time in the company’s history.

Amazon’s total revenue for 2020 accounted for $386.06 billion. It kept rising and reached $469.82 billion in 2021. According to the company’s latest financial reports, revenues for the three months that ended on March 31, 2022, rose 7% to $116.44 billion, compared to the same period in 2021.

Despite a boost in total revenue, Amazon suffered its first quarterly loss since 2015 as e-commerce sales fell and expenses rose. As a result tech giant Amazon’s share price edged down more than 30% this year.

However, Investors need to keep in mind that a single quarter’s performance is just a preview of how a company performed throughout one three-month period. They shouldn’t be overly shocked by a loss as a quarterly fall doesn’t always imply that a company is in trouble or that it has become a bad investment, especially when the company has reported an annual rise in total revenue.

People always talk about the negative impacts of the Covid-19 pandemic. In this article, we tried to show that it had some positive effects as well. Amazon is a great example! Hope it was informative for you!