In: Economics
Amazon is the world's greatest marketplace. Though Amazon's
primary source of income was the United States. It continues to
grow globally. Net revenues have significantly improved as of 2014.
Items accounted for almost 70 per cent of overall revenue in 2016.
Services sales expanded at a rapid rate.
With regard to operating income, the growth was driven primarily by
the high margins resulting from the selling of services. By looking
at the sources of revenue more closely, subscription and AWS
services have evolved.
That denotes how Amazon is expanding globally by increasingly
moving towards services
If we look at the Amazon sales model, a lot of items instantly pop up. As we have seen the online stores are still the center of the market. The core business, however, is the base for other emerging businesses operating its online stores with different logic. Where online stores take advantage of cash exchange cycles to operate at tight margins and high volume.Many aspects of the Amazon business model run at even higher margins, such as Amazon Advertisement Services, Amazon Prime and Amazon AWS. Amazon online stores are therefore the base for all other companies that in the long run make the overall organization more competitive
The cash machine marketing plan is one of the main aspects of
the Amazon business model. In short, Amazon has been (and still
does) working on its online store for years, at very small profit
margins.
Over the years, the company has done this happily, keeping its
costs small, comfortable compared to conventional retail stores,
and providing a fast and reliable distribution network, what Amazon
calls fulfillment centres.
As of the first nine months of 2017, Amazon more than doubled
its advertisement sales compared to 2018. The sales actually
increased from $2.92 billion in 2018 to $6.72 billion in
2018.
Amazon is still a small player, relative to Facebook's $38.37
billion and Google's $83.68 billion over the same period. However,
if we find that Amazon operates a diversified business model, with
many revenue sources, it also gives the company more room for
promotional experiments! A few people know the Amazon has become a
digital advertisement supplier among other companies. And not a
small one, but among the very few who can contend against the
Google-Facebook duopoly.