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Amazon Evaluation

In: Business and Management

Submitted By tracyj78
Words 359
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Amazon Evaluation The online shopping store, Amazon, is one of the most recognized online retail stores at this point. However, that does not come with its own share of hardships. It took 12 years to build the online store as well as an excess of two billion dollars. None of this makes a difference if the business does not have willing investors. Despite its 10 billion dollar annual sales, Amazon has margins that are only 4.1%, which is much lower than that of one of its main competitors; Wal-Mart with margins of 5.9%, the profit growth has far from been astounding to its investors. Compound that with the growing number of competitors in the online shopping business like the profits were lower than expected. This made the company take a new look at itself in order to revise its image.
Amazon soon discovered that since they only use 10% of their processing capabilities at one time, revenue could be created by providing a string of computing, storages, and other services. Some examples of these are simple storage, elastic compute clouds, and mechanical Turks. The simple storage (S3) provides additional revenue by charging customers a small fee for the gigabytes they use. Another form of additional revenues is the elastic compute clouds (EC2), which is where processing power can be obtained by customers by way of renting. Additionally, mechanical Turks are a combination of processing power and a network of individuals that are skilled in areas that computers cannot perform well, for instance identifying if a particular image is appropriate for the site.
Although, it is unclear at this time if going away from their core components was a wise decision or not, it is clear that no matter the issues that Amazon is/has faced they have still maintained their popularity among online shoppers. In order for Amazon to be determined a success,...

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