Amazon's business model is an e-commerce business model that is based on online retailing and delivery of products directly to customers. Amazon also offers cloud services, video and music streaming, online advertising and an e-commerce platform for third parties.

THE FOLLOWING IS A DESCRIPTION OF AMAZON'S BUSINESS MODEL USING THE BUSINESS MODEL FRAMEWORK:

• Customer segments: 

• • Consumers.
  • Companies.

• Value proposition:

  • Wide selection of products.
  • Fast and reliable delivery.
  • Competitive prices.
  • Prime Programme with additional benefits.
  • Wide range of services.

• Distribution channels:

• • Amazon website.
  • Mobile applications.
  • Physical shops (Amazon Go).

• Customer relations: 

• • Online interaction through opinions and ratings.
  • Online and telephone customer service.
  • Prime programme offering additional benefits.
  • Personalised recommendations based on purchase history.

• Sources of income:

  • Direct sales of products.
  • Prime subscriptions.
  • Cloud services and advertising.
  • Music and video streaming services.
  • Commissions for third party sales.

• Key resources:

  • Technology infrastructure.
  • Supplier network.
  • Distribution centre.
  • Customer database.

• Key activities:

  • Purchase and storage of inventory.
  • Supply chain management.
  • Product and technology development.
  • Marketing and advertising.
  • Research and development.

• Key partnerships: 

• • Partnerships with suppliers to ensure a wide selection of products.
  • Partnerships with third parties to offer services through the Amazon platform.
  • Partnerships with logistics companies to ensure fast and reliable delivery.

VALUE PROPOSAL

BASICALLY, ITS CREATOR HIMSELF HAS DEFINED THREE FUNDAMENTAL PROPOSALS FOR AMAZON TO BECOME THE FIRST CHOICE OF ANY CUSTOMER:

• Fast deliveryespecially if the customer selects the Premium option whereby the chosen product can be delivered to his home within 24 hours.
• Low pricesAmazon offers interesting offers and discounts all the time, in fact prices can vary substantially from one day to the next, resulting in interesting savings for the customer.
• Wide range of productsAmazon is now the world's largest retailer, virtually any category is available in its catalogue.

CUSTOMER SEGMENTS

AMAZON HAS BASICALLY TWO TYPES OF CUSTOMERS:

• Private customersmillions of customers around the world buy and use the company's services.
• Companiessellers who use the platform to offer their products for sale and thus reach a larger number of potential customers.

CHANNELS

The main distribution channel is Amazon's own website. whose online shop is available, under its own domain, in more than 10 countries around the world. In the case of countries where there is no dedicated website (and as long as there are no restrictions), customers can place their orders from the homepage: www.amazon.com. In addition, Amazon has alternative channels: its own app, the Amazon Prime platform, the Amazon Prime and a affiliate programme.

ACTIVITIES

Amazon's core business is the development and maintenance of its huge platformThe main sales engine that allows you to manage the massive range of services and products you offer to your customers. Amazon is therefore making a huge investment in managing and developing its platform, improving logistics systemsThe company is also active in the field of IT security, as well as in all businesses under its brand name.

CUSTOMER RELATIONS

Amazon offers numerous channels of communication with its customers, with a fast and instant response time in some cases thanks to the online chat option. Customers can also contact us by email and telephone. On the other hand, shoppers can interact through product reviews or evaluations.

SOURCE OF INCOME

AMAZON DERIVES REVENUE FROM A WIDE VARIETY OF CHANNELS:

• PatentsThe company holds more than 2000 patents to date.
• Web servicesis a platform oriented to offer technological resources to companies and organisations worldwide.
• Advertisingis one of the company's most powerful ways of attracting a large audience.
• Amazon PrimeThe Premium subscription model offers interesting incentives to its customers. In addition to receiving their orders in less time and without shipping costs, subscribers are entitled to unlimited photo storage and access to the catalogue of series, movies and music (see Deezer business model).
• Amazon Kindleis Amazon's exclusive reading platform where customers can access an extensive catalogue of books, magazines and exclusive catalogues. It even offers the possibility for independent authors to publish their works and market them on the platform.

RESOURCES

• The main asset of this trading giant is its powerful technological structure which allows you to manage a high volume of orders in different parts of the world, instantaneously.
• On the other hand, Amazon has physical infrastructures as offices and warehouses.
• The physical structure includes the human resources These include engineers, IT specialists, developers, designers and customer service staff, among others.

PARTNERS

AMAZON'S MAIN PARTNERS ARE:

• ClientsAmazon Prime: are the company's core partners and provide the largest share of revenue. It is estimated that there are more than 100 million customers worldwide, of which around 65% are users of the premium service, Amazon Prime.
• Logistics companiesThe external companies supplying the boxes and seals, as well as the companies responsible for distribution.
• AffiliatesAmazon's product visibility: these are the people who, through their own websites, are in charge of giving visibility to Amazon's products and receive a commission in return. Their role is essential for increasing traffic and attracting new customers (similar to the Etsy's business model).
• Independent authorsare those who create content independently and use Amazon's platform to give visibility to their work. They do this by publishing directly on Kindle, the company's digital book service.

COST STRUCTURE

AMAZON HAS A COMPLEX COST STRUCTURE THAT INCLUDES:

• Information Technology (IT) Infrastructure: includes applications and devices necessary for the operation of the business.
• Physical spaces: offices, warehouses, distribution and sorting centres, delivery stations.
• Marketing.
• Software development and maintenance.
• Human resources.
• Commissions for affiliates.

AMAZON FACTS

• Jeff Bezos is inspired by the Amazon River to create what he believed would be the world's largest online shop.
• The Amazon logo depicts a curved arrow imitating a smile. The letters A and Z are intertwined in this line.
• The company's first slogan was: "The biggest bookshop on Earth".
• The first idea Jeff Bezos had for the name of his company was ".Cadabra".
• In 2021, the site suffered a worldwide crash that resulted in a loss of $5.7 million.

The The size of Amazon's warehouses is 700 times the size of Madison Square Gardens. and could contain the water of 10,000 Olympic-size swimming pools. Answering these questions will help you have a clear vision of your business model and ensure that you have a solid and sustainable plan to build and grow your business.