How does a company that sells books become a titan when it comes to a variety of new services? What Amazon has been doing in this decade is memorable. However, the path from what it was at the beginning to what we see now is not very clear. If you want to discover what happened, we from Finances Credit have some insights for you.
If you are not acquainted with what is Amazon, we explain it briefly. Amazon is a colossus of e-commerce. Its services involve media, hardware, logistics, data storage, and payments. If you are searching for a book, a gift, or something for your house, you probably will find your item on the company website. Besides that, Prime, Amazon’s signature membership program, has an estimated 85 million subscribers in the US. The range is absurdly wide.
What is the Amazon thing? What can we learn from it?
The Flywheel philosophy
Something you should know is that every Amazon business step brings with it the “flywheel” philosophy. This is a term that Jeff Bezos (Amazon’s CEO) borrowed from business consultant Jim Collins. Basically, He describes it as a circular process that involves cutting prices to bring more clients. If you are used to shopping online, you know that the prices of the company can be very different from those you would find while shopping on site.
The low prices increase sales and obviously attract more customers. That being so, the company ends up benefiting from economies of scale. Since it is a cycle, spinning the flywheel anew is possible through a re-cut on the prices. This seems to be the best expression of Amazon’s aims: customer-obsession and the mastery of the contemporary economy world. It seems a lot for a company that sells books, but they did it.
Put your clients first
Because of the very philosophy that sustains Amazon, putting the client first is key. To Bezos, offering great customer service and keeping prices low were fundamental measures that guaranteed the company success. Because of that, the investment in its complex logistics is enormous. For instance, in 2012 Amazon purchased Kiva Systems, a company that makes robots for $775 million.
Despite its expensiveness, Amazon investments bring great results. If you want to see some of them in your own company, perhaps you could apply some of them at a low scale. Research how to do it effectively, make a plan, and put it into practice. It may take a while, but the results will come.