Amazon by Joseph Joe Ricardo

Amazon.com 1
Joe Ricardo
Business 620
APUS
October 25, 2015

Amazon the Online Retail Juggernaut
Amazon
Introduction
Amazon is currently the world’s largest online retailer but it was a long road for this
company to get to their dominant position. The company was founded in July of 1994 by Jeff
Bezos and it was not until a year later that the company sold its very first book. By May of 1997
Amazon.com Inc., began its first public offering. The company quickly expanded from an online
book store to an online retail company selling numerous products and services. The company
eventually expanded globally and fulfills orders in over 200 countries. The company is now the
largest online retailer in the world and is continuing to expand every day with new innovative
technologies and programs to increase the customer’s satisfaction and experience.
Amazon a High Technology Company
Amazon is a high technology company because much of their success has come with the
technological improvements to their website, which has made for a much better customer
experience. Amazon’s retail website is a superior website compared to competitors such as eBay
and other online retailers. Not only does Amazon provide competitive prices and convenience,
but their site is easy to use, their search results are very accurate and they have a great selection.
They use customer traffic data to direct their users to other products that are similar based on
what they have purchased as well as what they have viewed. Amazon’s Prime which gives their
customers 2 day delivery on products directly sold by Amazon and its direct affiliates, also offers
their customers their streaming service. Amazon Prime compared to Netflix and Hulu has a
much larger selection, although many of their offering cost extra to rent, usually for a nominal
extra fee.
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State Taxes
For the most part Amazon collects state taxes in most states. They in fact collect state
taxes in 25 states, those states comprise of 77% of the country’s population (Davis, 2015). For
years Amazon attempted to avoid the complications of numerous state tax laws by not charging a
state tax on its customers. It has recently even cut ties with retailers in several states to avoid
their high tax rates. There is really no federal laws to give online retailers a clear cut template on
how to conduct their business in the 50 states and territories but there are attempts to pass
legislation such as the Marketplace Fairness Act. Until some sort of clear legislation and
guidelines are set in place online retailers will continue to find loopholes around current policies
to avoid state taxes and offer their customers better prices than their mom and pop and brick and
mortar competition. I think Amazon should avoid sales taxes in as many states as they can until
legislature forces them too, and continue to keep their competitive advantage.
Investing in Same Day Delivery
Amazon is currently testing out same day delivery in select markets for their Prime
customers. The city in which I live in Orlando has become the 18th
city that Amazon has
introduced their same day delivery to (Arnold, 2015). Personally the Primes 2 day delivery was
sufficient for me, but many consumers want immediate gratification and this is what Amazon is
fulfilling in select markets. This helps to eliminate the one advantage brick and mortar stores
have in being able to give their customers the products they purchase in real time. Many items on
Amazon and through other online retailers can take as long as several weeks to arrive to the
customers, especially those being shipped from overseas. Investment by Amazon is a good one
because it provides people with the ease of access to products from the comfort of their own
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home an advantage that was only previously available by going into a brick and mortar store and
purchasing the product in person.
Drone Delivery
Amazon has also introduced a drone delivery is in the development with plans of having
the capability to deliver packages in 30 minutes to customers door steps (Pramuck, 2015). The
program is expected to be available in select markets in the next few years and will be called
Amazon Air. Amazon is still waiting for the FAA to complete its regulations on drone operations
before finalizing the program. Until these regulations are put in place Amazon would be jumping
the gun on the drone deliveries and to reform the program to the changes that would come in
regulations would be more costly to overhaul. Once they can get the program up and running it
will help reduce the cost of delivery by not having to pay for a delivery driver. It will also create
the convenience of immediate gratification to customers who can get their products almost
immediately after ordering them.
Amazon Kindle
Amazon released its first Kindle e-reader in 2007 for only $79 which allowed customers
to read books from the convenience of their own portable device (Pearce, 2013). In 2010, Apple
unveiled their iPad, the first commercially successful tablet computer. In order to compete with
Apple, Amazon came out with the Kindle Fire with a retail price of $199, which was more than
$300 less than Apple’s iPad’s. Even with the huge discounted price Apple has continued to
dominate the tablet computing market with a 60% share. Amazon’s Kindle and the variety of
Android tablets continue to stay behind the iPad’s even with the discounted price and what many
feel is a superior experience. Apple consumers have a brand loyalty not seen in with many
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brands. Amazon needs to create more incentives for the purchase of their tablets, possibly several
free months of Amazon Prime.
Conclusion
Amazon is the dominant player in the online retailing market. In order to remain at the
top they must continue to improve their website and services to remain the number one online
retailer. Many top competitors come and go for instance MySpace was overthrown by Facebook,
Yahoo! lost its top search engine spot to Google, and eBay lost its top spot as an online retailer to
Amazon. With the rapid changes and advances in technology today it is easy for a once top
competitor to lose its position to a more innovative and motivated brand. For now Amazon will
remain at the top of the online retail industry, and their future dominance will depend on their
continued improvements upon their site. It will take a lot of continued hard work to stay ahead of
the competition but their main concern needs to remain on the ease of use of their website,
customer support and speedy deliveries.
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Resources:
Arnold, K. (2015). Same-day Amazon Prime shipping hits Orlando. Orlando Sentinel. Retrieved
from http://www.orlandosentinel.com/business/os-amazon-same-day-shipping-orlando-
20151021-story.html
Davis, C. (2015). Sales-Tax-Free purchases on Amazon are a thing of the past. Tax Justice Blog.
Retrieved from http://www.taxjusticeblog.org/archive/2015/06/sales-
tax_free_purchases_on_am.php#.Vi1FzX6rTIU
Pearce, J. A., & Robinson, J. R. (2013). Strategic Management: Planning for Domestic
& Global Competition (13th ed.). New York, NY: McGraw Hill.
Pramuk, J. (2015). Why Amazon’s drone delivery is growing trickier. CNBC. Retrieved from
http://www.cnbc.com/2015/06/17/why-amazons-drone-delivery-is-growing-trickier.html
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Amazon by Joseph Joe Ricardo

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Amazon by Joseph Joe Ricardo