Company In Focus: Amazon – Origins and Early Days.

Welcome to “Company in Focus” – a weekly series where I discuss some of the world’s largest companies, including Google, Facebook, Amazon, Twitter and many more of the business world’s behemoths. Each company will be profiled in three sections across three weeks. For the next three weeks, we will be taking a look at the world’s richest man, Jeff Bezos’ Amazon (AMZN). This week, we focus on looking at how Amazon started, the business ideas they implemented, and the problems they faced during its infancy. 

Origins:

Amazon launched on July 16, 1995, as a website that solely focused on selling books. Despite starting as an online bookstore, Jeff Bezos always knew that he wanted Amazon to be “an everything store”. However, Amazon was not Bezos’ initial idea when it came to naming the company. Originally, Bezos favoured the names “Cadabra” and “Relentless” (if you search for relentless.com today, it navigates to Amazon) but finally chose “Amazon”, as he enjoyed the idea that his company would be named after the largest river in the world. Just like some of the other leading companies in the world, Amazon started out of Bezos’ garage, and this came with its fair share of (humorous) issues. According to Business Insider, in Amazon’s early days, the servers that the company used required so much power that Bezos and his wife couldn’t run a hair dryer or a vacuum in the house without blowing a fuse.

Early days:

Many companies begin their operations with the objective of survival, and Amazon was no exception to this. Despite the resounding success we see today, Amazon once had to utilise a loophole to avoid bankruptcy during its early days. Book distributors required retailers to order ten books at a time, and Amazon didn’t have the sales that would require them to keep ten books in their inventory. Nor did they possess the necessary finances to do so. Instead, Bezos and his team ordered one book that they needed and nine copies of a lichen book, which was always out of stock. These outside-the-box tactics ensured that the company survived in its infancy.

However, outside-the-box tactics were not a predominant aspect of Bezos’ early strategy. He expected employees to work 60-hour weeks at a minimum and prided himself on sweat equity to grow the company. This work ethic, combined with the growth in global consumption enabled Bezos’ Amazon to become the biggest online sales platform in the world by 1999.

By 1999, Amazon had decided to start selling other goods, starting with music and DVDs. Soon after, electronics, toys and kitchen utensils were also a mainstay in the Amazon warehouses. Popularity with customers was aided by the growing network of US warehouses which extended what the company could offer. This tremendous level of growth, however, caused issues for the company. The ever-increasing levels of supply and demand meant that the distribution centres were busier than ever. Machines were switched on for more extended periods; employees worked longer shifts, and this caused power outages and extensive fatigue amongst employees. Additionally, consumer demands were constantly changing, and competition increased at an incredible rate in the early 2000s. 

Tune back into The Corporate Feed next week, as I discuss how Amazon overcame their obstacles to become the second trillion-dollar company in history. We will take a closer look at Amazon’s ‘winning formula’ and the different products and services they introduced to swat away potential competitors who threatened their meteoric rise to the top.  

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  1. Great insight into the history of AMZN. A good read to a familiar company who are keeping many companies in jobs during this current climate.

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