Question

1. Does Amazon buy most of its warehouse automation software from others, or is most of the software written in-house? Why do you suppose this is the case?
2. What is the cash conversion cycle (CCC)? What factors enable Amazon to have a CCC that is negative? Why are offline rivals unable to match these efficiencies? What advantage does this give Amazon over rivals?

PLEASE SUMMARIZE! No more than 1 paragraph is necessary!

Answer 1

Many Retailers dont have its Warehouses, they just have backrooms or stores in which they used to keep their major products. For Amazon, Its not a big deal to have warehouses. Amazon stores the majority of the stuff its sell on its platform and increasingly, the stuff other businesses selling on their platform

CCC is the number of days that a entity takes to convert resources into cash. Amazon deals with money differently than most corporations that enables them to be more efficient and profitable. Amazon uses the operation referred to as, the cash conversion cycle is a period between distributing cash and collecting funds associated with a given operation. Amazon has been able to make a profit because the there has been high inventory turns that allow items to not be on the shelf collecting dust.

Amazon has a cost structure advantage on companies that they are similar with, such as, Walmart and Target. Walmart and Target are businesses that have hundreds to thousands stores all across the country. Walmart and Target use a exceptional amount of money compared to Amazon on the their businesses. A large chunk of the profits that Walmart and Target make go towards the management and operation of stores and all the employees. Amazon on the other hand uses their profit to expand on warehouses and create/use new software. Amazon has established a business in which the majority of management and operation comes from the electronic realm.