Amazon Competitive Edge – Why is Amazon so successful?
Amazon Competitive Edge
The e-commerce giant is unquestionably one of the biggest corporations on our planet. It operates in more than 60 countries and reaches above 1.3 billion customers. Amazon competitive edge is however much more than just ecommerce services.
Have you ever been wondering why Amazon has grown so much? Why has it outstood its competitors? And why is it one of the top choices for investors?
There are a few reasons, but in today’s article, we will focus on three of them. “Customer-first” approach, cloud services, and investments and cash flow operations.
Customer-first approach
It’s a no-brainer that Amazon puts its customers at the top of its list of priorities. Sellers who want to sell on this marketplace should meet several requirements connected with this objective. And these are sharp.
If you are an Amazon customer, you feel that your needs are met. If you want to return the purchased item, you can do it very easily and very fast. You will probably be refunded even on the same day. If the product you get does not meet your requirements, you can also exchange it as comfortably as in the previous case.
Amazon’s algorithm provides you with the most relevant items anytime you are looking for them. The price looks good, the delivery time is set for tomorrow, and the reviews are excellent.
It all looks perfect but let’s try to see it through the eyes of sellers. These days, you have to be extremely flexible to meet your customers’ needs. But, while selling on Amazon, you need to be even more than this.
All those requirements are highly cost-consuming, but you don’t really have a choice, do you? At the end of the day, Amazon gets all the e-commerce traffic you need, so you want to profit from it as well. So you have to adjust.
Many businesses say that customer satisfaction is a priority for them. But not all can achieve it. Amazon succeeds in this field which is why its further growth is inevitable.
Cloud services
Amazon is not the only giant that invests in these kinds of opportunities. Alphabet, Microsoft, and Apple do this as well. But it’s Amazon that is a leader, having over 30% of the market share.
Based on the reports for 2021 provided by the corporation itself, Amazon made almost 18 billion $ in 2022 on cloud services. It’s a 40% growth compared to 2020. But it’s not the end.
Only recently has Amazon made new deals with some big fishes – Nasdaq, Meta, and Goldman Sachs to name a few. They currently invest in new infrastructure to expand further – mainly in the Asia Pacific and Western Canada.
Currently, Amazon provides over 200 features for their web service customers. It has, however, informed about further development of 5g solutions, data visualizations and more. All this together should help Amazon to stay in the lead of the cloud services race.
Investments and cash flow operations
One of the biggest investments of Amazon is mentioned cloud services solution. But that’s not all. To name all investments Amazon made in the past 20 years, I would need to write this article for at least a dozen a4 pages.
So, let’s just focus on the main branches directors of this corporation chose to invest in.
Let’s start with a quite obvious one. Amazon invests in its own brands of electronic devices and clothing. One of the most famous devices is the Echo speaker with Alexa AI software. These speakers are highly popular in the marketplace, and they come with an Amazon solution that tends to be Apple’s Siri direct competitor.
Another investment Amazon has made is the payment solution. These days, corporations provide sellers with an opportunity to use Pay with Amazon. The US giant implemented this solution in 2007, and it’s getting more and more popular.
Amazon also invests in various online entertainment solutions. The most important ones are Amazon Prime Video and Twitch. While the first one provides videos on demand in the Prime subscription, the second one is mainly used as the e-sport branch for sharing live videos. Both solutions are booming, and they are the top choices of people in the given fields.
But none of the mentioned would be possible without Amazon’s great financial condition. At the end of 2021, Amazon had over 96 billion $. That’s enough to pay all the obligations the corporation has for 2022. Yeah, it’s crazy. And gives the company a huge advantage.
Golden times ahead for Amazon?
As you can read above, several factors influence Amazon’s success. And believe me, there are much more of them. In today’s article, I wanted to provide you with a subjective list of the biggest Amazon’s competitive edge.
There are, however, more and more e-commerce companies that grow rapidly. Alibaba Holding seems to currently be the main competitor for Amazon. But will it manage to beat it in the game that Amazon develops?
We will all have to wait for the answer. But the truth is that Amazon, leaving all their challenges aside, is very well prepared for further growth. And it does not seem that it will be any other way. To learn more about Amazon and our services click HERE.
