Electronic commerce industries that make “e-commerce” possible are growing at breakneck speed, altering not only how Americans, but also the global marketplace produces, markets, and acquires goods and services. In the e-commerce industry, it is generally agreed that Amazon.com provides one of the best business model “benchmarks” today.
Amazon.com came online in the summer of 1995 with a mission to use the Internet to transform book buying into the fastest, easiest and most enjoyable shopping experience possible. According to their home page Amazon.com “since the summary of 1995 our customer base and product offerings have grown considerably, millions of people in more than 220 countries have made Amazon.com the leading online shopping site.” When you visit Amazon.com, you can buy books, music, videos, and more–by a click of the mouse.
While the company has yet to turn a profit, they have revolutionized e-commerce by making customer interaction and feedback part of their brand image. Amazon’s method is to create a “community” of consumers. Much of their products speaks for themselves, so the customer feedback provides an objective measuring stick for the integrity of Amazon’s services. Individuals may express their opinions on all available products. Promoting such favorable business environment Amazon hopes to reinforce awareness and confidence in e-commerce customer population, as well as encouraging best practice among competitors.
Amazon’s competitive threats come from other e-commerce, Web sites like: Walmart.com, Barnes & Noble.com, Ebay.com, etc. Amazon knows that customers are sensitive to product quality and price, and personal information security so at Amazon.com they can expect to benefit from all three offerings. Amazon.com has a world-class management team led by Mr. Jeffrey P. Bezos founder and company’s Chairman of the Board and Chief Executive Officer. He has exceptional knowledge of the industry. As stated in the home page new release “On a single Saturday in July, 100 airplanes and 9,000 trucks delivered more than 250,000 copies of “Harry Potter and the Goblet of Fire” to customers,” providing the hottest kid’s book faster than local bookstores. This action clearly shows the powers of our suppliers and buyers. Amazon.com is committed to customer satisfaction despite our accumulated deficit of $2.3 billion and a deficit of $967 million in stockholders equity in FY 00. Amazon lost $720 million in fiscal year 99, which ranked us in the top five of Fortune 500’s top losses for that year.
Amazon.com fits into the monopolistic competition category.
Consumers can purchase nonperishable products online such as: literature, music, videos, coins, stamps, tools, etc.
With e-commerce sales estimated to hit $200 billion by 2004, it’s imperative that we look at environmental impact. On the surface, e-commerce industries such as Amazon.com appear to offer a big environmental bonus by eliminating millions of trips to malls. However, after closer examination, one can see a net environmental impact that is decidedly murky. According to Scott Matthews, a research scientist involved in assessing environmental impacts of technology at Carnegie Mellon University in Pittsburgh, “On-line shopping does reduce commuting in gas-guzzlers and the need to build more retail stores. But every book ordered on the Web, is heavily packaged and moves on a transportation network that taps many resources.” So instead of shipping, 10 books in one box, now its 10 books heavily packaged in 10 boxes to e-commerce customers.
Governmental regulatory initiatives include the establishment of an Expert Group to advise the Minister for Financial Services and Regulation on consumer protection aspects of e-commerce, and business on consumer protection issues and negotiating a range of multi-lateral and bilateral international agreements. The key international policy initiative for e-commerce is the Organization for Economic Cooperation and Development (OECD) Guidelines for Consumer Protection in the Context of Electronic Commerce. The OECD is made up of 29 member countries and is one of the world’s peak bodies for the development of economic and social policy. The Guidelines were released in December 1999 and are now being used by most member countries as the chief policy tool for the regulation of e-commerce.