Amazon - Business Models

     Amazon operates under a business model with many moving parts. First, the company sells products directly to the consumer. Percentages of goods are presented to buyers through Amazon's online front page with a little markup. The inventory is kept in the company's largest network building. The consumer always thinks items on Amazon are less expensive and readily available for purchase and 2 days shipping. Amazon also provides another platform for other companies to sell the product to buyers. Product sold through Amazon's partner retailer are normally less common items or those with a higher purchase price. That will allow Amazon stay away from holding slow-moving items that could lower the profit margin. While Amazon does not charge a fee to list the items for sale but the company does hold a small percentage of the sale price as commission.

     Amazon also has a subscription-based business model which call Amazon Prime. Under Prime account, the consumer pays an annual fee to secure the free two days shipping on eligible items. Prime member also have access to streaming media such as music or video. Amazon also creates more benefit for Prime membership such as Prime Now and Hotwheel. Prime Now is where the consumer can order item and will get it deliver to their address within 1-2 hours. Hotwheel is where customers can order food and get it deliver to their address within 1 hour.

     If Amazon would use a different business model such as Infomediary model, which mean to resell useful data from the customer, I believe that the company would not become a famous e-commerce today. 10 years ago, Amazon could just collect all the data the company gathered from the consumer and sell it off to a marketing company and make a chunk of money. A lot of marketing company would put a big bid for consumer behavior's data. Those marketing will use those data to put ads on the internet while you browse around. The CEO of Amazon, Jeff Bezos, had the long-term vision for the company. He planted the seed in the customer from the start when the company still selling the book. He made the customer feel safe for the transaction, the customer receive their product and this company is trust worthy. Now he uses the data that he collected to sell the more useful item to the consumer. Due to that reason, the company continues to success and grow bigger.