Successful E-Commerce Sites: Amazon
27 March 2012 05:17 | Posted by Luke
Internet Retailer has unveiled its Top 500 Guide to ecommerce sites, with Amazon topping the list, followed closely by Staples and Apple. Jeff Bezos, Amazon CEO, has been branching out recently into hardware with the Kindle Fire, hoping to corner the low-cost tablet market and grab some of the iPad’s market share.
The success behind the Kindle Fire can be traced back to the implementation of the ecosystem upon which the entire Kindle brand is built. The first Kindle, launched in 2007, allowed Amazon to control User Experience across both hardware and distribution; the company began to earn revenue not only from the ebooks it was selling, but also from the hardware used to consume those books.
The digital distribution model hit publishers hard, and Amazon is now taking further strides into the ‘ecosystem model’, allowing Kindle Fire users to consume not only books, but movies, TV shows and apps. All of this content is filtered through the Amazon store, resulting in huge profits for Bezos & Co.
Bezos himself has been quoted as saying that the Kindle Fire is less of a product and more of a ‘media service’. The important difference between the iPad (the perennial yardstick against which the Kindle Fire is measured) and the Amazon's offering is that the iPad emphasises downloading, and therefore physical storage. The Kindle Fire instead opts to put its emphasis on streaming, meaning that the tablets can be produced with much smaller physical storage, reducing the cost. Kindle Fire users, rather than hosting files locally, can store up to 20 GB of music for free on Amazon’s servers (or an unlimited amount of music bought from the company). They can then stream it freely, along with more than 100,000 videos.
The figures seem to suggest that Amazon is on track for a landmark year, with Wikinvest reporting that the past quarter has been Amazon's most profitable yet, with profits rising steadily throughout 2011.
It remains to be seen whether or not Amazon and Bezos can reach the dizzying heights of Apple. Despite being ahead of the Cupertino giants on this list, Amazons company valuation still falls dismally short of Apples. Still, Amazon last year recorded their most profitable year yet, and with the European market still eagerly awaiting the arrival of the Kindle Fire, 2012 could be a landmark year for the retailer. Apple had better keep one eye open, just in case.