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Amazon was founded on July 5, 1994, by Jeff Bezos in Bellevue, Washington.[6] The company originally started as an online marketplace for books but gradually expanded its offerings to include a wide range of product categories. This diversification led to it being referred to as "The Everything Store".[7]
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The company has multiple subsidiaries, including Amazon Web Services, providing cloud computing, Zoox, a self-driving car division, Kuiper Systems, a satellite Internet provider, and Amazon Lab126, a computer hardware R&D provider. Other subsidiaries include Ring, Twitch, IMDb, and Whole Foods Market. Its acquisition of Whole Foods in August 2017 for US$13.4 billion substantially increased its market share and presence as a physical retailer.[8]
Amazon has a reputation as a disruptor of industries through technological innovation and aggressive reinvestment of profits into capital expenditures.[9][10][11][12] As of 2023[update], it is the world's largest online retailer and marketplace, smart speaker provider, cloud computing service through AWS,[13] live-streaming service through Twitch, and Internet company as measured by revenue and market share.[14] In 2021, it surpassed Walmart as the world's largest retailer outside of China, driven in large part by its paid subscription plan, Amazon Prime, which has close to 200 million subscribers worldwide.[15][16] It is the second-largest private employer in the United States.[17]
Amazon went public in May 1997. It began selling music and videos in 1998, and began international operations by acquiring online sellers of books in the United Kingdom and Germany. In the subsequent year, it initiated the sale of a diverse range of products, including music, video games, consumer electronics, home improvement items, software, games, and toys.[33][34]
In 2002, it launched Amazon Web Services (AWS), which initially focused on providing APIs for web developers to build web applications on top of Amazon's ecommerce platform.[35][36] In 2004, AWS was expanded to provide website popularity statistics and web crawler data from the Alexa Web Information Service.[37] AWS later shifted toward providing enterprise services with Simple Storage Service (S3) in 2006,[38] and Elastic Compute Cloud (EC2) in 2008,[39] allowing companies to rent data storage and computing power from Amazon. In 2006, Amazon also launched the Fulfillment by Amazon program, which allowed individuals and small companies (called "third-party sellers") to sell products through Amazon's warehouses and fulfillment infrastructure.[40]
Amazon purchased the Whole Foods Market supermarket chain in 2017.[41] It is the leading e-retailer in the United States with approximately US$178 billion net sales in 2017. It has over 300 million active customer accounts globally.[42]
Amazon saw large growth during the COVID-19 pandemic, hiring more than 100,000 staff in the United States and Canada.[43] Some Amazon workers in the US, France, and Italy protested the company's decision to "run normal shifts" due to COVID-19's ease of spread in warehouses.[44][45] In Spain, the company faced legal complaints over its policies,[46] while a group of US Senators wrote an open letter to Bezos expressing concerns about workplace safety.[47]
On February 2, 2021, Bezos announced that he would step down as CEO to become executive chair of Amazon's board. The transition officially took place on July 5, 2021, with former CEO of AWS Andy Jassy replacing him as CEO.[48][49] In January 2023, Amazon cut over 18,000 jobs, primarily in consumer retail and its human resources division in an attempt to cut costs.[50]
On November 8, 2023, a plan was adopted for Jeff Bezos to sell approximately 50 million shares of the company over the next year (the deadline for the entire sales plan is January 31, 2025). The first step was the sale of 12 million shares for about $2 billion.[51]
Amazon.com is an e-commerce platform that sells many product lines, including media (books, movies, music, and software), apparel, baby products, consumer electronics, beauty products, gourmet food, groceries, health and personal care products, industrial & scientific supplies, kitchen items, jewelry, watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items, toys and games, and farm supplies[53] and consulting services.[54] Amazon websites are country-specific (for example, amazon.com for the US and amazon.co.uk for UK) though some offer international shipping.[55]
Results generated by Amazon's search engine are partly determined by promotional fees.[59] The company's localized storefronts, which differ in selection and prices, are differentiated by top-level domain and country code:
In 2000, US toy retailer Toys "R" Us entered into a 10-year agreement with Amazon, valued at $50 million per year plus a cut of sales, under which Toys "R" Us would be the exclusive supplier of toys and baby products on the service, and the chain's website would redirect to Amazon's Toys & Games category. In 2004, Toys "R" Us sued Amazon, claiming that because of a perceived lack of variety in Toys "R" Us stock, Amazon had knowingly allowed third-party sellers to offer items on the service in categories that Toys "R" Us had been granted exclusivity. In 2006, a court ruled in favor of Toys "R" Us, giving it the right to unwind its agreement with Amazon and establish its independent e-commerce website. The company was later awarded $51 million in damages.[70][71][72]
In 2001, Amazon entered into a similar agreement with Borders Group, under which Amazon would comanage Borders.com as a co-branded service.[73] Borders pulled out of the arrangement in 2007, with plans to also launch its own online store.[74]
In November 2013, Amazon announced a partnership with the United States Postal Service to begin delivering orders on Sundays. The service, included in Amazon's standard shipping rates, initiated in metropolitan areas of Los Angeles and New York because of the high-volume and inability to deliver in a timely way, with plans to expand into Dallas, Houston, New Orleans and Phoenix by 2014.[76]
In June 2017, Nike agreed to sell products through Amazon in exchange for better policing of counterfeit goods.[77][78] This proved unsuccessful and Nike withdrew from the partnership in November 2019.[78][79] Companies including IKEA and Birkenstock also stopped selling through Amazon around the same time, citing similar frustrations over business practices and counterfeit goods.[80]
In November 2018, Amazon reached an agreement with Apple Inc. to sell selected products through the service, via the company and selected Apple Authorized Resellers. As a result of this partnership, only Apple Authorized Resellers may sell Apple products on Amazon effective January 4, 2019.[83][84]
Amazon sells many products under its own brand names, including phone chargers, batteries, and diaper wipes. The AmazonBasics brand was introduced in 2009, and now features hundreds of product lines, including smartphone cases, computer mice, batteries, dumbbells, and dog crates. Amazon owned 34 private-label brands as of 2019. These brands account for 0.15% of Amazon's global sales, whereas the average for other large retailers is 18%.[85] Other Amazon retail brands include Presto!, Mama Bear, and Amazon Essentials.[86]
Amazon derives many of its sales (around 40% in 2008) from third-party sellers who sell products on Amazon.[87] Some other large e-commerce sellers use Amazon to sell their products in addition to selling them through their websites. The sales are processed through Amazon.com and end up at individual sellers for processing and order fulfillment and Amazon leases space for these retailers. Small sellers of used and new goods go to Amazon Marketplace to offer goods at a fixed price.[88]
Publishers can sign up as affiliates and receive a commission for referring customers to Amazon by placing links to Amazon on their websites if the referral results in a sale. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[89] In the middle of 2014, the Amazon Affiliate Program is used by 1.2% of all websites and it is the second most popular advertising network after Google Ads.[90] It is frequently used by websites and non-profits to provide a way for supporters to earn them a commission.[91]
Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service. A new affiliate product, aStore, allows Associates to embed a subset of Amazon products within another website, or linked to another website. In June 2010, Amazon Seller Product Suggestions was launched to provide more transparency to sellers by recommending specific products to third-party sellers to sell on Amazon. Products suggested are based on customers' browsing history.[92]
Amazon allows users to submit reviews to the web page of each product. Reviewers must rate the product on a rating scale from one to five stars. Amazon provides a badging option for reviewers which indicates the real name of the reviewer (based on confirmation of a credit card account) or which indicates that the reviewer is one of the top reviewers by popularity. As of December 16, 2020, Amazon removed the ability of sellers and customers to comment on product reviews and purged their websites of all posted product review comments. In an email to sellers Amazon gave its rationale for removing this feature: "... the comments feature on customer reviews was rarely used." The remaining review response options are to indicate whether the reader finds the review helpful or to report that it violates Amazon policies (abuse). If a review is given enough "helpful" hits, it appears on the front page of the product. In 2010, Amazon was reported as being the largest single source of Internet consumer reviews.[93] 152ee80cbc
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