BUSINESS MODEL OF AMAZON.
                     BUSINESS MODEL OF AMAZON
INTRODUCTION
 Amazon has a business model that is diversified. 
Amazon reported more than $280 billion in sales 
and more than $11.5 billion in net income in 2019. 
 Internet stores, led by Offline Stores, Amazon AWS, 
Subscription Platforms, Third-party Distributor 
Services, and Advertisement revenues, contributed 
to over 50 percent of Amazon revenues.
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Source: fourweekmba.com
THE JOURNEY
 Started in 1994 as a bookstore, Amazon quickly 
expanded and became the shop of all. The main 
business model of the group is focused on its online 
store. Amazon opened the physical stores, which 
produced sales of more than $5 billion in 2017.
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Source: theverge.com
Amazon Prime 
 In the overall market strategy of Amazon, Amazon 
Prime (a subscription service) also plays a vital role, 
as it helps consumers pay more and become more 
faithful to the platform. 
 In addition, the organisation also has AWS, the cloud 
platform, which is a global leader and a high-margin 
enterprise. 
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Source: fourweekmba.com
ADVERTISEMENT 
BUSINESS
 Amazon already has a quarter of billion dollars 
worth of advertisement business. 
 Thus the mix of the Amazon business model seems 
like multiple businesses in one. 
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Source: fourweekmba.com
PERFORMANCE 
MEASURE
 Amazon tests its performance through an obsession 
with consumer experience, lowering costs, reliable 
tech infrastructure, and creating free cash flow.
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Source: bbc.com
LARGEST 
MARKETPLACE
 Amazon is the largest marketplace in the world. 
Even if the United States was Amazon's main source 
of revenue. 
 Net revenues have, also, risen since 2014. Goods 
accounted for about 70 per cent of gross revenue in 
2016. 
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Source: capitalism.com
HOW DOES AMAZON’S 
BUSINESS WORK?
 As a core model, Amazon runs a cloud business 
model and many business divisions within it. 
 Some units are closely related to the e-commerce 
network, such as Prime and the Advertisement 
sector. 
 Other units, such as AWS, helped strengthen the 
software infrastructure of Amazon.
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Source: businessstrategyhub.com
HOW DOES AMAZON 
MAKE MONEY?
 You will see that Amazon makes the majority of the 
profits from the purchase of goods. 
 These retail prices, however have high costs as well. 
The margins that Amazon makes on them are 
therefore small.
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Source: www.fecoms.com
AMAZON’S BUSINESS 
MODEL
 Amazon, the world's leading retail marketplace, runs 
a corporate model of multiple shifting elements. 
 The business sells products directly, first and 
foremost. 
 A percentage of items are sold to customers with a 
limited markup through Amazon's online store, and 
inventory is stored in the large distribution network 
of the business. 
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Source: www.investopedia.com
AMAZON'S PARTNER 
RETAILERS
 Amazon allows a forum for other vendors to 
distribute goods to customers in addition to direct 
sales.
 Products sold by the associate retailers of Amazon 
are either less popular items or ones with a higher 
selling price, helping Amazon to stop keeping slow-
moving inventory that may dilute earnings. 
 Although Amazon does not assess a fee for its dealer 
partners to list goods for sale, as a commission, the 
company keeps a portion of the purchase price.
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Source: www.fortune.com