Amazon Company Advantages and Disadvantages | Free Essay Example

Amazon Company Advantages and Disadvantages

Words: 571
Topic: Business & Economics
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Amazon.com is a recent response to the traditional retailing business. The company represents an efficient model of electronic commerce, which offers a wide choice of computer devices, bookstores, video games as well as clothing and furniture. The business is centered in Seattle and dates from 1994. The company was founded as an Internet retail of literature. However, in two years, according to the extension of Web commerce, the founders of Amazon offered twenty main products, which became the subjects of Internet marketing.

The instant popularity of Amazon raised numerous objections among the proponents of traditional retailing. For instance, there was strong opposition between Barnes & Noble bookstore, which experienced some serious downfall in selling since Amazon attracted a great part of the latter’s clients. In the course of the case, which was initiated by Barnes & Noble against Amazon, the former denied the existence of web marketing and stated that Amazon was simply a book broker. The argument, however, did not affect the fame of the Internet store since it is believed to be one of the most convenient ways of commerce in the modern technology world.

The advantages of Amazon.com considerably outweigh the benefits of traditional bookstore marketing. Thus, for instance, Internet commerce type requires a reduced level of safety stock, which contributes to lowering the initial inventory holding costs. The strategy that was adopted by the managers of Amazon includes an increased level of forecasting. Thus, according to the real marketing outcomes, the experts manage to deduce, which products are of the greatest value to the clients. This technique assists in building a further inventory distribution. Moreover, the location postponement is the good quality of a web store as well (Agha, 2009).

The efficiency of marketing is interrelated with the conception of reorder point, which specifies the correlation between the level of inventory and the replenishment of a stock. The formula of reordering may be calculated from several primary factors. Specifically, it relies on the amount of safety stock, lead time, and customary daily use. If one compares the ratio of reordering, which applies to Amazon store, to the results of traditional retail point estimations, it is evident that the former is higher than the latter. First, an efficiency of Amazon marketing stems from the effective assessment procedures, which are traditionally conducted by the company employees (Huston, 2015).

Thus, the global web commerce is quite easy to control, for one may monitor the ratings of selling from one place by accessing the public databases of the firm. Consequently, the experts control the tendencies of marketing and separate the products, which are regularly purchased from those, which do not find much attention among the customers. According to such analysis, the company builds a system of safety stock, which corresponds to the reorder support. Moreover, through such examination, it is possible to pose a short lead time on the production, which is mostly employed as well as impose postponed leads on the particular subjects.

Finally, the control of product delivery is easily maintained since the company owns a range of inventory stores, which are compactly situated in the major cities. The distribution allows directing the ordered products to the clients on time. Moreover, Internet sailing excludes the possibility of unavailable production, which is quite common in the general stores. Therefore, it may be concluded that web commerce establishes the model of efficient technology use and brings multiple benefits to the customers.

References

Agha, M. (2009). Case study: Amazon improvement of customer service by improving inventory management. Web.

Huston, M. (2015). Amazon unveils reorder buttons and devices that order for you. Web.