about amazon as a company and its background.

1. Case study
By: Mahek Dave
Himanshu Suthar
Krishna Bhansali
Farhan Jokhiya

2. ABOUT AMAZON
 It was founded in 1994 by Jeff Bezos, it went public in May
1997.
 Initially it was an online marketplace for books, It has now
morphed into an Internet based enterprise that is largely
focused on providing e-commerce, cloud computing and
AI services.
 It has multiple subsidiaries including Amazon Web
Services(AWS), Zoox(autonomous vehicles), Kuiper
systems(satellite internet), and Amazon
Lab126(hardware).
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3. WHAT ARE ITS STRENGTHS ?
STRONG BRAND NAME
Successful brand image in the
market which helps maintaining
a strong position.
CUSTOMER ORIENTED
It caters to a large number of
customers for everyday needs at
inexpensive prices.
COST LEADERSHIP
Doesn’t incur costs in
maintaining physical retail
stores by selling everything
online. It has a strong value
chain system.
BRAND VALUATION
Amazon is ranked at #2 position
with a brand value of $249
billion dollars.
DIFFERENTIATION AND
INNOVATION
It brings creative ideas and
innovative additions to its
product line like ambitious
drone delivery service and
withings Aura Smart Sleep
System.
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4. WHAT ARE ITS WEAKNESSES ?
EASILY IMITABLE
BUSINESS MODEL
Online retail businesses are
quite common and are followed
by rivals like Barnes & Noble,
eBay, etc.
LOSING MARGINS
It’s free shipping to customers
can be one of the reasons that
expose the risks of losing
margins in some markets.
PRODUCT FLOP AD
FAILURES
Its Fire Phone’s launch in the US
was a big failure while its Kindle
Fire device didn’t even grow
well.
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5. WHAT ARE ITS OPPORTUNITIES ?
PHYSICAL STORES
By expanding physical stores,
Amazon can improve
competitiveness against big box
retailers and engage customers
with the brand.
IMPROVEMENT
To improve technological
measures and organizational
policies to reduce counterfeit
sales.
EXPANSION
It can expand its operations in
developing markets.
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6. WHAT ARE THE THREATS ?
GOVERNMENT
REGULATIONS
It can threaten business of
Amazon in some critical
countries like Cuba, Iran, North
Korea etc.
CYBERCRIME
Increasing cybercrimes can
affect the network security
system of the company.
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LINKS TO EXPLOITIVE
LABOR
It is one of 3 retail giants
facing scrutiny from US for
maintaining supply chains and
labor sources associated with
human rights abuses.
COMPETITION
Aggressive competition with big
retail firms like Walmart,
Target, etc.
Though in India it has a kind of
duopoly with Flipkart.
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7. PRODUCT BENEFITS
Cool and stylish product
Areas for community connections
Online store and market swap
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8. AMAZON PROFIT MARGIN
 There are two types of profit margins on Amazon: operating, and gross. Your operating
margin is how much money you can put back to the business after sales, and it includes fees
and expenses. Your gross margin is similar, but counts all the fees in totality from start to finish.
 And when it comes to fees, these are the ones you can expect to encounter.
• Seller Account Fee: This is how much you pay Amazon each month to have a Seller Account.
The basic plan charges $0.99 per item sold, while the Professional version charges $39.99 for
unlimited sales.
• Referral Fee: Whichever category you sell in, Amazon will charge you a fee on every sale you
make, which is a percentage of the product’s price.
• FBA: There are tons of benefits to using FBA, but you do have to pay fees for it (monthly
inventory storage fee, and fulfilment fee per unit).
• Variable Closing Fee: This is how much gets charged on shipping the item and gets taken off
the grand total of the sale.
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9. Manipulating Operational Costs to Affect Profit
Margin
 The good (and not-so-good) part of selling on
Amazon is no number ever stays the same. While it
can make it tricky to 100% predict costs and margins,
it does give you a tremendous amount of flexibility to
affect both.
 Use marketing and advertising as an example. Say
you decide to funnel 5% of your profits into marketing
and advertising until you reach X dollars — this
temporary investment might eat into your profit
margins and cut it down to, say, 20%, but once your
campaign is over, if it was successful, it could lead to
a spike of 45% profit margins, meaning your one-
time cost led to a higher profit margin over the long
run.

10. AMAZON MARGIN HITS
 Most companies focus on their bottom-line earnings
and profits. At Amazon, it was all about the top-line
revenue story. The company believes that by
increasing market share, it can eventually
leverage economics of scale to lower cost. Once it
has a high market share, Amazon can also exercise
some pricing power over customers. Critics claim that
the company must eventually start showing more
profits and eventually pay dividends. Amazon may not
be able to sustain its sales exuberance forever.
 Amazon’s operating profit margin hit 5.5% in the
fourth quarter of 2020. As recently as 2014, Amazon's
operating margin was actually negative. Part of the
increase in the operating margin is due to the rapid
growth of Amazon Web Services. Web services are
generally a much higher margin business than retail,
so we might expect higher profit margins going
forward. The other explanation is that Amazon is

11. REVENUE FOR AMAZON
According to Amazon's latest financial reports the company's current
revenue (TTM) is $502.19 B. In 2021 the company made a revenue of
$469.82 B an increase over the years 2020 revenue that were of $386.06
B.
The revenue is the total amount of income that a company generates by
the sale of goods or services.
Amazon makes money through its retail, subscriptions, and web services,
among other channels.
Retail remains Amazon's primary source of revenue, with online and
physical stores together accounting for the biggest share

12. ANNUAL REVENUE
Year Revenue Change
2022 $502.19 B 6.89%
2021 $469.82 B 21.7%
2020 $386.06 B 37.62%
2019 $280.52 B 20.45%
2018 $232.88 B 30.93%
2017 $177.86 B 30.8%
2016 $135.98 B 27.08%
2015 $107.00 B 20.25%
2014 $88.98 B 19.52%
2013 $74.45 B 21.87%
2012 $61.09 B 27.07%
IN 2012 Net sales were $61.09 billion, a 27.1%
increase from $48.08 billion in 2011 year. North
American net sales totaled $34.81 billion, up
30.4% from $26.70 billion in 2011. North America
accounted for 57% of sales .
Amazon revenue for the twelve months ending
September 30, 2022 was $502.191B, a 9.66%
increase year-over-year.
In 2012 to 2022 amazon revenue increased
$441.1B

13. HOW AMAZON GENERATES IT’S REVENUE
Amazon makes money through its retail, subscriptions,
and web services, among other channels. Retail remains
Amazon's primary source of revenue, with online and
physical stores together accounting for the biggest
share.
Amazon makes money through its retail, subscriptions,
and web services, among other channels.
Retail remains Amazon’s primary source of revenue, with
online and physical stores together accounting for the
biggest share.
Amazon Web Services (AWS) currently generates all of
Amazon’s operating profits and is growing at a robust
pace.
Amazon is currently facing a union vote at its warehouse
in Bessemer, Ala., and may face another one starting on
March 25, 2022, from employees at a facility in Staten
Island.

14. BUSINESS MODEL
 THE BUSINESS MODEL OF AMAZON CONSISTS OF FOCUSING ON
INVESTING IN TECHNOLOGIES, ENHANCING ITS LOGISTICS
APPLICATIONS, R&D ACTIVITIES AND SECURING ITS INVENTIONS USING
PATENTS.
 AMAZON HAS BEEN INVESTING CONSIDERABLY IN ROBOTICS AND
DRONE TECHNOLOGIES FOR THE PAST DECADE.
 BESIDES LOGISTICS, AMAZON’S AWS IS SIGNIFICANTLY BIGGER THAN
MANY OF THE BIG CORPORATIONS.
 AMAZON IS PROBABLY THE BIGGEST CLOUD COMPUTING COMPANY IN
TERMS OF REVENUE COMPARED TO MICROSOFT.
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15. FUNDING
$14,000
Angel Investments
Amount obtained through
other investors
$12,000
Property
Revenue obtained from
property rentals
$32,000
Cash
Liquid cash we have on hand
$82,000
Shares
Number of shares
converted into USD
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16. THE FLYWHEEL MODEL
• If there is one founding principle that Amazon has
remained ruthlessly committed to since its genesis, it is
customer centricity.
• Essentially, the Amazon flywheel model is centered
around price value.
• Lower price structure led to more customer visits, more
customers increases volume of sales and thus attracts
more commission paying third party sellers to the site.
• This influx of stakeholders increases Amazon’s vast and
diverse product selection.
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17. SUMMARY
• SWOT analysis
• Profit Margin
• Revenue
• Business Model
• Flywheel effect
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18. THANK YOU
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