When it comes to disruptive technologies, there’s only one company that reigns supreme. Amazon ($AMZN). Amazon as well as its pioneering founder and CEO, Jeff Bezos, are responsible for changing the way industries are run than I could think of and are still doing. In this piece, I’m going to go over the factors that make Amazon an efficient business and the various industries that have been disrupted.
When was the last moment you went to the doors of a Barnes & Noble ($BKS)? or any other bookshop for that matter? How about the last time you visited Amazon’s website? I’ll bet that nearly all of you have been browsing the Amazon website over the last couple of days, and I’m equally likely to bet no one has been to an actual bookstore for long time. The bookstore industry, symbolized by the once-mighty Barnes & Noble, was the first victim of Amazon’s disruptive tendencies.
The origins of Amazon date back to 1994 when the company launched an online bookstore. With the design of an online retailer, Amazon was able to provide a wider range of products than physical stores, along with being able to offer the same selection at a lower cost to consumers.
In the way that the market for free does, customers choose the most affordable option when offered an identical product or service. In the year 2007, Amazon had surpassed Barnes & Noble in the amount of money it earned from book sales, in the same year that they launched their first edition of Kindle ebook reader. In 2010, digital book sales exceeded physical book sales via Amazon. Visit:- https://www.cruxfinder.com/
Amazon is also the owner of the company’s website and Audible, one of the biggest players in the audio book business. In the year 2011, Borders Group, what was only a few years before the second largest bookstore chain across the United States filed for bankruptcy in 2011, and was shut down just a few months after. At the time of writing this piece, Barnes & Noble has a market cap of approximately $45 million.
Amazon has a market cap of approximately eighty-two billion dollars. In terms of market cap, Amazon is worth nearly 2000 times as much as Barnes & Noble. Amazon’s entrance into the bookselling industry and its replacement of businesses that were prior cemented in their place is the first of many industries the Amazon bull has disrupted.
NO END IN SIGHT
After direct retail sales and the fees charged to third party vendors via the Amazon site, Amazon has the biggest percentage of their revenue via the Amazon Web Services (AWS) division. AWS has a long history dating back to 2006. Through the course of the year 2006 Amazon began to launch a succession of products, Simple Storage Service (S3) which is a storage for files service that, as the name suggests, would be. It was a simple Queue Service (SQS), intended to automatize message queues. In the final part of their year in style, the company introduced Elastic Cloud Computer (EC2), a service that lets users pay for servers to run applications and simulations. Today , there are over 100 services available under the umbrella of Amazon Web Services that can fulfill almost every need in the digital world. In the present, almost half of cloud computing services are managed by Amazon. Like events that impacted the bookshop business, Amazon has taken control. In 2020 cloud computing is expected to be more than $400 billion in value. And Amazon will continue to lead this market for the foreseeable future.
CLAIM TO FAME
The Retail and grocery industry is a great illustration of an industry that has been changed by Amazon and what they’re best known for. But, first of all, Walmart ($WMT) has just about triple the revenues of Amazon which means it’s not like Bezos and Co. have come to dominate the retail industry, but they certainly have had a significant impact on. One could say that they have disrupted the market. Although they were established around 1994, for most of the time they were a simple online bookshop In 1998, the company broadened it’s catalog and began to sell more than only books. Since then, the company’s online sales have grown dramatically year after year, and they have even been accused of forcing many conventional retailers out of business. Amazon is able to generate around 85% of its revenue from their retail business, so clearly it’s the largest part of Amazon. In the early days of online retail, Amazon has been able to establish themselves in the ranks of most significant retail players despite being entirely online. Partly, it was due to the ease of use and lower prices. More recently, in 2017, Whole Foods, a premium grocery store, was acquired by Amazon to further their market share in the grocery and retail scene. Through their online retail division and the physical grocery store, Amazon is able to take a sizable market share, and also hold the power over the space. Just to illustrate the size of Amazon in perspective, more than two thirds of households are subscribed to the Amazon Prime subscription.