Amazon Success Story – Jeff Bezos (Founder of Multi-billion Company)
In this Amazon success story, we should discuss about Jeff Bezos who is the founder and CEO of multi-billion dollar company. Amazon most of you know it as the online marketplace, where you can buy anything from six-foot-tall 150 pound Bigfoot statues to Nicolas Cage pillowcases. Yeah, Amazon sells pretty much everything, in fact, they currently have a selection of over 100 million different products to choose from.
And they also shipped about 5 billion items last year alone that accounts for nearly 40% of everything sold on the Internet. But even though Amazon is known by consumers as a company that makes money by selling products online, that actually isn’t?
In fact, Amazon loses money on nearly every single purchase that is made through its website. So how did Amazon make its money, how is it profitable and how did they become the mammoth of an e-commerce company like they are today.
Well, it actually started off with fairly modest beginnings, this is the story of Amazon, let’s take you all the way back to the 1990s with the top fads were beanie babies Tamagotchis and yes the Internet.
It is true that when I was a kid the information superhighway as we called it was an unknown but growing sector of the economy. Actually, the term growing maybe a little bit of an understatement in this case.
Because the growth of e-commerce in 1994 was nearly 2,300 percent a young Wall Street executive named Jeff Bezos has been paying attention to the growth of the internet and decided to leave his Wall Street firm in order to start an e-commerce company.
He did this because he had something which he called a regret minimization framework which meant that he never wanted to wake up one day when he was 70 years old and regret not trying to start a business with a massive growth opportunity like the Internet.
So Mr. Bezos packed up moved to Seattle and began to work on a business plan for his new e-commerce company which he called “Cadabra Inc” not what you were expecting I’m guessing.
He then went to legally incorporate the company Cadabra Inc except that his lawyer misheard the company name and incorporated it as “Cadaver Inc” which was a little bit too dark for Bezos liking.
So he came up with another name relentless again I’m guessing that’s not what you were expecting Bezos purchased relentless calm in September of 1994 but after, his friends told him that it sounded too sinister he ended up settling on amazon.com.
One little side note or fun fact here is that if you were to type in a “relentless.com” into your address bar or into Google, you’ll find that she redirects you to amazon.com.
So the next thing Bezos did was he created a list of 20 categories of products that could be sold on his website and he specifically wanted a wide variety of products to exist, within each one of those categories he then narrowed it down to five categories.
They were compact discs, computer hardware, computer software, videos, and books. Eventually, he decided to focus on books due to the high demand for books the large amounts of titles available and the low price point.
Within two months of launching amazon.com, the company had sold books in 45 countries and it was making over $80,000 per month little did they know that within 25 years Amazon would soon be making $80,000 every 14 seconds.
Revenue for Amazon continued to grow over the next couple of years, so they decided to go public in 1996 and they were listed on the Nasdaq. Amazon stock IPO dot the equivalent of a dollar and 50 cents price per share.
And when you look at Amazon stock price today which is a cool $1500 you can do the math and calculate that if you invested $10,000 in Amazon’s IPO in 1996 it would be worth roughly 10 million dollars today.
However, Amazon would hit a few rough patches over the next few years. Barnes & Noble sued Amazon in 1997 alleging that Amazon’s claim to be the world’s largest bookstore was false because it isn’t a bookstore at all it’s a book broker.
The suit was settled out of court and Amazon continued to call itself The world’s largest bookstore. Amazon was then sued again by Walmart in 1998 alleging that Amazon stole some of Walmart’s secrets by hiring former Walmart executives the suit was also settled out of court despite these lawsuits Amazon continued to grow at a tremendous rate by mainly selling books.
But selling just books was not good enough for Jeff Bezos so, later in 1998 the company made a big decision to expand beyond books and started selling a little bit of everything. This was the first step that Amazon took towards becoming an everything store.
The decision to start selling everything made Amazon’s revenue jumped to nearly 1 billion dollars cementing itself as one of the Giants of the e-commerce industry. Investors soon became very fond of Amazon and it is upside potential made Amazon's stock price reaches 113 dollars per share in 1999 and indirectly making Jeff Bezos a billionaire and TIME’s Person of the Year.