What started out as a simple online bookstore is now one of the world’s largest and richest organizations ever. Rivaling only Apple in terms of revenue, Amazon has expanded its operations from e-commerce and tech to media streaming and production.
Just how big of an operation are they? Well, as of 2019, Amazon is one of only two corporations in the country to reach the $1 Trillion valuation cap, beaten only by Apple in 2018. But Amazon’s journey to the top was a long and arduous road, literally starting from Jeff Bezos’ garage. Here’s a quick look at the corporation that re-defined what it’s like to live in the 21st century.
Started From the Bottom…
Is Amazon a corporation? Yes, it is; in fact, it’s one of the most successful corporations out there. But it wasn’t always like this.
Despite having a cushy job as the VP of a Wall Street firm, Jeff Bezos chose to leave and start making his own fortune. In 1994, Jeff Bezos relocated from New York to Washington State to start an internet company, something that might be commonplace now, but remember: the internet was a fairly new and much-underappreciated piece of tech back in the early ’90s.
Luckily for Jeff, his company was able to get a sizable capital (with the help of investment firm Kleiner Perkins Caufield & Byers and, of course, his parents), and by July of 1995, his company website was up and running. But it wasn’t the Amazon we know and love today, not yet.
In fact, it wasn’t even called Amazon when it launched.
Originally named “Cadabra”, Amazon started its internet life as an online bookseller, but after Jeff’s lawyer casually mentioned that the name kind of sounds like ‘cadaver’, Jeff knew he needed to rebrand. They played around with a few other names, including Relentless, Awake, MakeItSo, Browse, and BookMall (Relentless.com is still live and it redirects you to the main Amazon site), but in an Amazon interview, Jeff mentions that he and his team finally decided on Amazon because it sounded “exotic”, and to imply scale (the Amazon was the largest rainforest in the world, Amazon.com carried the tagline “Earth’s biggest book store). It also helped that, at the time, search engines ranked websites alphabetically, meaning that Amazon would be one of the first websites to come up first.
In the end, Bezos settled on Amazon.com to suggest scale (Amazon.com launched with the tagline ‘Earth’s biggest book store’) and because website listings at the time were alphabetical, meaning that Amazon would appear at the top.
Even Amazon Tries to Save
Although Amazon received a sizable capital at its launch, Jeff and the team still tried to cut corners in order to maximize their operations. One anecdote recalls how the Amazon CEO insisted that they use doors for desks. Realizing that buying doors and sticking legs on them were cheaper than buying desks, Jeff Bezos implemented this throughout the company. Of course, nowadays, the trillion-dollar company doesn’t need to be cheap when it comes to desks for their employees. However, the ‘door desk’ legacy lives on, with many employees receiving a door-inspired desk while employees who put forward and execute ideas that help save money being given a ‘Door Desk Award’. This, of course, gives more poignant meaning to Amazon’s slogan of ‘Work Hard. Have Fun”.
Other money-saving plans Jeff and his team implemented in the early days of Amazon included not having a warehouse to store inventory; when Amazon received an order for a book, employees would simply find the book online, have it shipped to the office, repackage it with Amazon packaging, and then send it to the customer. Nowadays, of course, Amazon operates around 75 warehouses, or ‘Fulfillment Centers’, all around the country, but it’s fun to imagine if the company still somehow operated from a garage.
When the company started, Jeff Bezos tried to keep their operations as lean as possible, which meant that marketing also needed to start small. During the first couple of years of Amazon, instead of spending tens of thousands of dollars on marketing stunts or expensive street signs, Jeff and his team would hire mobile billboards to drive around the brick-and-mortar stores of their main competitor, Barnes & Noble. The billboards would encourage people to go to Amazon.com in order to find the books that the bookstore wasn’t carrying. Not exactly illegal, but still, pretty cheeky.
Stumbling Blocks
It’s hard to believe now, but Amazon actually struggled to stay alive for the first few years of its existence; in fact, the company’s first reported profitable quarter was in January of 2002, a full 7 years after its launch. That year, Amazon reported a decent $5 million in revenue.
During the launch of Amazon back in 1995, unscrupulous customers successfully exploited a loophole in the site’s programming that allowed them to trick Amazon’s servers into sending them money. The scheme worked by ordering a negative amount of books from the site, tricking the site’s servers into believing that it’s the company that owed them money. While losses were minimal, they still cost the then-new company a fortune.
As Amazon grew, so did the attention it got from its competitors: in 1997, bookstore chain Barnes & Noble sued Amazon for having a false claim in their “Earth’s Largest Bookstore” tagline. The suit was eventually settled out of court, although Amazon continued to use the slogan, much to Barnes & Noble’s chagrin.
In 2012, Amazon lost $5.7 million after the site went down for 45 minutes. Causes are still unknown, but it wasn’t the first time the company lost money because of a computer problem. Of course, by then, Amazon had become an industry-leading giant, buying out online shoe retailer Zappos for $1.2 billion in 2009 and the Washington Post for $250 million in 2013. With that kind of money, $5 million seems like a drop in the well.
…Now We’re Here
By 2018, Amazon had more than 300 million active customers from more than 100 countries around the globe, and it’s estimated that the company has the capacity to service more than 1.2 billion more. Amazon is so big, in fact, that by 2017, it made up a little more than 45% of the e-commerce industry worldwide.
The “everything store” makes money all throughout the year, but 3 out of 365 days stand out: Prime Day, Cyber Monday, and Black Friday. In fact, Black Friday and Cyber Monday 2018 shattered sales records, with the company reporting more than 180 million products being ordered from the site between Thanksgiving and Cyber Monday, with the latter being even bigger (exact sales figures are kept secret).
Since its introduction in 2015, Prime Day (which happens in July) has been one of Amazon’s busiest days, with sales going up by 53% in Europe and a whopping 93% in the United States. Because of its initial success, Amazon turned Prime Day into a 2-day sale extravaganza.
And what of Jeff Bezos? Well, from his ‘humble’ beginnings as the VP of an investment firm to the CEO of one of the most profitable corporations in existence, his wealth is now estimated at $164 billion, making him the richest man in the world. Talk about a Prime day!
