The Amazon story from books to food and fast fashion.
The story of how Amazon became the world’s largest online retailer is a fascinating one. From extremely humble beginnings—a single employee and a base of operations in a garage—to the retail giant of today, Amazon exists because its founder saw an opportunity and committed to it whole-heartedly.
The Start of an Online Shopping Revolution
In 1994, Amazon founder Jeff Bezos was 30 years old and working on Wall Street. The internet was just starting to take hold, and he had read about how internet usage was growing at an astonishing rate. Bezos recognised the business opportunities that existed for those who were savvy enough to take advantage of them, and started thinking about what kinds of products could be sold online. He made a list of potentials, and eventually decided that books were the choice with the most potential.
His next step was to find a source of funding; Bezos was lucky enough that his parents were both willing and able to provide his initial startup funds. According to Bezos himself:
“The first initial start-up capital for Amazon.com came primarily from my parents, and they invested a large fraction of their life savings in what became Amazon.com. And you know, that was a very bold and trusting thing for them to do because they didn’t know. My dad’s first question was, “What’s the Internet?” Okay. So he wasn’t making a bet on this company or this concept. He was making a bet on his son, as was my mother. So, I told them that I thought there was a 70 percent chance that they would lose their whole investment, which was a few hundred thousand dollars, and they did it anyway.”
So, in 1994 Jeff Bezos quit his job, and started selling books online, using his garage as a base of operations. Within just one month, the fledgling company was selling $20,000 worth of merchandise every week.
Amazon from 1994 to Today
1994: Jeff Bezos quits his job to sell books online, using startup funds borrowed from his parents. The company has always operated according to a slow and steady approach, with a policy of putting its revenue back into growth and expansion.
1995: Bezos and Amazon raise $8 million in funding, obtained from Kleiner Perkins Caulfield & Byers.
1997: Amazon goes public, at an initial price of $18 per share.
1998: Amazon makes its first acquisition, buying Bookpages.co.uk, which eventually became the UK branch of Amazon.
1999: Jeff Bezos is Time Magazine’s Person of the Year. Amazon began to expand its product range to include consumer electronics, computer software, homewares, toys, and more.
2000: Amazon took a hit when the dot com bubble crashed, with share prices dropping from $107 to $7, but thanks to a solid business plan, managed to survive and begin thriving once more.
The year 2000 also saw Amazon start to sell its online retail platform to other retailers. And since retailer gained the option to use the platform on Amazon’s own site, the company effectively increased its product range in relatively simple fashion. Since, then Amazon’s product range has been both extensive and variable, with everything from home appliances, to fashion and makeup, to fresh gourmet food on offer.
Also in this year, the company made its first attempt to sell ebooks, by adding PDF and Microsoft Reader versions of selected books to its marketplace. The company made several attempts at launching an electronic bookstore but it wasn’t until 2007 that its efforts paid off.
2001: It took a long time for Amazon to achieve profitability, but the company finally managed this late in 2001. Jeff Bezos was unfazed during this long journey, believing in a tortoise-like approach to profitability that no doubt helped the company weather the storm of the dot com crash.
2006: Amazon launches its own web services company and enters the cloud. Amazon Web Services now dominates the market, with billions in revenue every year.
2007: On November 19 Amazon launched its own eReader, the Kindle. The device sold out within 8 hours. This success is a great demonstration of the Amazon philosophy: previous attempts at setting up a digital bookstore had been largely unsuccessful, but the company persevered and eventually got it right. By 2010, Amazon was selling more ebooks than print books.
2015: Amazon opened its first physical bookstore, in Seattle.
2016: Amazon announces plans to build convenience stores, and opens a flagship Amazon Go store in Seattle.
2017: The world’s largest online retailer looks nothing like it did three decades ago. From its small beginnings in the garage of Jeff Bezos, Amazon employs more than 300,000 people worldwide, sells around $100 billion worth of goods annually, and earns revenue of over $60 billion a year.
Amazon recently acquired the Whole Foods chain of supermarkets, and plans to open its 10th bookstore, in Belleveue Washington.
According to Bezos, the key is being both stubborn and flexible: “If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”