When it comes to the latest disruptive technology, there’s a single company which is the king of the hill. Amazon ($AMZN). Amazon and its pioneering CEO and founder, Jeff Bezos, are responsible for changing more industries than I could remember, and they’re still going. In this article , I’m going to describe the reasons behind why Amazon an efficient business and the multitude of industries that were disrupted by it.
When was the last time you walked into the doors of a Barnes & Noble ($BKS)? Or any other bookstore or even a bookstore? What was the last time you visited the Amazon website? I’ll wager that almost all of you have been browsing the Amazon website over the last few days, and I’m equally inclined to bet that no one has been to the physical store in a while.
The industry of bookstores, represented by the former giant Barnes & Noble, was the first victim of Amazon’s unpredictable tendencies. Amazon’s roots go back to 1994, when the company launched an online store.
By design as an online bookstore, Amazon was able to provide a wider range of products than any physical bookstore, in addition, it was able to provide the same range at a cheaper cost to the consumer. Visit:- https://www.cruxfinder.com/
The way the free market operates, consumers choose the cheaper option when offered the same product or service. By 2007, Amazon had surpassed Barnes & Noble in revenues from book sales. It was also the same year they released its first version Kindle E-Book Reader. In 2010, sales of digital books exceeded physical book sales via Amazon. Amazon is also the operator of the website and company Audible which is among the biggest players in the audio book game. In the year 2011, Borders Group, what was just a few years before, the second-largest bookstore chain of the United States filed for bankruptcy, and ceased to exist within a couple of months.
As of the writing of this article, Barnes & Noble has an estimated market capitalization of $454 million dollars. Amazon has the market cap of $832 billion dollars. By market cap valuation, Amazon is worth nearly 2000 times the value of Barnes & Noble. Amazon’s entry into the bookstore industry and its replacement of businesses that were previously in their place is one of the industries that the Amazon bull has changed.
NO END IN SIGHT
After the direct retail sales as well as fees charged to third party vendors that are listed on the Amazon websites, Amazon has the biggest percent of its revenue via it’s Amazon Web Services (AWS) division. AWS is a part of Amazon’s history dating through 2006. Over the course of the year 2006 Amazon came out with a number of new services. Simple Storage Service (S3), a file storage service as the name would suggest. The service is called Simple Queue Service (SQS), intended to automatize messages queues. In the final part of the year, they announced Elastic Cloud Computer (EC2) which is a service that allowed users to pay for servers’ time to run programs and simulations. In the present, there are more than 100 different services offered as part of Amazon Web Services that can fulfill almost every need in the digital world. In the present, almost half of cloud computing services are managed by Amazon. Similar to the how the bookstore business, Amazon has taken control. In 2020 cloud computing is predicted to be $400 billion in value. In addition, Amazon is poised to lead the market for a long time to come.
CLAIM TO FAME
The retail and food industry is a perfect example of an industry that’s been changed by Amazon and the things is their most well-known for is. But, first of all, Walmart ($WMT) has less than triple the revenue of Amazon which means it’s not as if Bezos and Co. have come to dominate the retail market, but they’ve definitely created a gap. It’s possible to say that they’ve changed the game. While they were founded at the time of 1994, for most of the time they were just an online bookstore However, in 1998, the company expanded its catalog and started to sell more than only books. Since that time, Amazon’s online sales have grown dramatically each year, and they’ve been accused of putting many other traditional stores out of business. Amazon produces around 85% of their revenues from their retail business which is the biggest part of Amazon. Through the pioneering of online retail, Amazon was able establish their position in the ranks of top retail companies despite being online. They also benefit from the convenience and lower costs. More recently, in 2017, Whole Foods, a luxury grocery store, was bought by Amazon in order to increase their share of the grocery and retail scene. With their online retail arm and the physical grocery store, Amazon is able to capture a substantial market share and have authority over the industry. Oh and just to make it easier to put the power of Amazon into perspective, it is estimated that over two-thirds of households have an Amazon Prime membership.