Amazon business model: Data operation runs through Amazon

Article Description: Amazon business model.

In Seattle, Amazon is a low profile. Outside the office building in its headquarters, you can't even see its logo. In this High-tech city, there are software giants such as Microsoft, Expedia, the world's largest online travel company, whose neon lights sparkle in the night sky of Seattle, and even Silicon Valley star companies such as ebay and Facebook set up offices here, Because it brings together the top engineers in America.

Many of the hottest engineers in the company are geeks at Amazon. The world's largest online retailer, after Google's second-largest internet company, has created a huge online business empire. We all know that Amazon has the most advanced warehouse in the retail industry in the world, knowing that it first launched cloud computing services, but its internal workings, its success secret, does not have a complete jigsaw puzzle.

IT manager World cover article: Three Customers in Amazon

However, in some respects the Amazon is very high and aggressive. At the end of March, "IT manager World" visited Amazon headquarters and its location in the Phoenix warehouse, from Amazon founder Bezos to interviews with executives responsible for technology, global sales, operations, wireless, merchant services and so on, up to Phoenix warehouse employees, the most common word they ever raised was the "customer experience."

"Bezos is not keen on fashion, he does things in the long run. Why always mention the customer experience, because he felt that this is the business can always stick to things. "A man who used to work around Bezos and knew Bezos told us.

At Amazon, employees can take their dogs to work, and there are low taps and sinks for dogs and even Rufus names on some doorknob, the first dog to enter the Amazon. This is a very good business for the staff, the tea room is always filled with a variety of beverages. However, it is better for customers, every employee from Bezos to Amazon, in the process of talking to them, they will clearly point out that the core tenet of the enterprise is "customer experience", from the day of creation to the present, has never changed.

It's a high-profile place for Amazon--Bezos always loudly announces to the world that Amazon is going to be the most customer-centric company on Earth. Today's Amazon serves three major customers-consumers, businesses and developers. Selection, price and convenience are the three pillars of the Amazon customer experience. Executives here rarely talk about sales, profit and other indicators, more emphasis on the customer experience, innovation and other words, more emphasis on the "input" and "output" between the relationship, they believe that a good customer experience is positive input, if the continuous maintenance of good "input", then sales, profits and a series of "output" indicators will be good.

In Bezos's words, this is "doing the right thing". Let's go into the Amazon and visit every detail to see what they're doing.

Amazon's flywheel

Rich choice, convenience and low price make up the three pillars of the Amazon flywheel. The customer experience is both the starting point and the end point, thus forming a virtuous circle, which promotes the rapid development of the Amazon.

This is the 1998 Bezos, he founded the Amazon is a soon established bookstore. More than 10 years later, Amazon is already the world's largest online retailer, cloud computing service provider, the largest e-book seller.

What company is Amazon?

There is no doubt that it topped the list of global online retailers with sales of 24.51 billion dollars (2009). Since the founding of the 17, every step of the Amazon innovation has been eye-catching, it has been on the internet to open up a new path to retail business, which makes it a global e-commerce enterprise benchmarking;

But Amazon Vice president and CTO Werner Vogel said: "Amazon's first position is a technology company." When Bezos was creating the Amazon, it wasn't about opening a bookstore, but trying to use the Internet to do something else that couldn't be done. ”

Vogel, tall and burly, spoke with a faint gleam of melancholy in his eyes, which made him look like a poet, not as lean as the geek we imagined. Is that he led Amazon in 2006 to launch the AWS (Amazon Web Service) service. The solution, which includes S3 and EC2, is the world's most easy-to-use and widely used cloud computing service. AWS has opened a new direction for Amazon, and it has also been an explosive spot for its shares in recent years.

Indeed, in the Amazon, innovation and customer demand are almost always technology-driven or supportive. Business systems, whether retail, supply-chain or warehousing, are developed by Bezos's "intelligent, passionate, hard-working" engineers who support the rapid and orderly operation of this vast business empire. Amazon has 4 consecutive years of "Business weekly" global IT companies top 100. This is the magazine's annual survey of more than 30,000 listed IT companies, based on shareholder returns, per-share returns, total revenue and revenue growth indicators such as the assessment.

Amazon is actually a data company. Amazon will spend a lot of time researching the needs of businesses from a data perspective to help them increase sales, Sebastian, senior vice president of merchant services worldwide. In the Amazon, all the business units are very attached to the data, the site can be based on the consumer's shopping behavior, calculate his preferences, before the next shopping to push the goods he might like; the business unit launches a new feature with a small range of tests. For example, a A/B testing a new function, that is, to push different versions to different users, through the data feedback to understand the user's true preferences.

Retail companies, technology companies, data companies ... Which one is the real Amazon?

Yes, they are Amazon's qualities, powerful technical capabilities and data operations, and the grafting of online retailing makes the company a unique attraction. However, after meeting with Amazon founder Bezos at Seattle headquarters, I had a deeper understanding of the company after interviewing a number of Amazon global executives.

"We have to create a better customer experience based on the long-term." "At Seattle headquarters, Bezos told the IT manager world." From the first day of its creation, the customer experience was Bezos's business creed, and Bezos was relentless in its efforts to enhance the customer experience, both during a period of rapid growth and when the dotcom bust was over 2000 years old.

In 1998, he proposed that Amazon's goal was to build the world's most customer-centric enterprise, while shares fell sharply in 2000, and in the face of Wall Street accusations, Bezos quoted Benjamin, the Wall Street financial guru. Graham famously said: "In the short run, the stock market is a voting machine, but in the long run, the stock market is a weighing machine." "Like a business belief," he wrote in his letter to the shareholder, "We are burying ourselves in building an increasingly heavy business." ”

11 years later, at Seattle's Amazon headquarters, he said the same thing when "IT manager World" asked what kind of power he still had in the doldrums.

To enhance the customer experience, Amazon has been a consistent strategy for more than more than 10 years, it is simple and pragmatic, so that the company has more than 30,000 employees, business around the world in more than 10 countries, a large business empire, can quickly understand and through the implementation.

In the Amazon, everyone knows the "flywheel", its starting point is the customer experience, which refers to the customer experience as the starting point of a virtuous circle. Bezos believes that in the Amazon flywheel, when the customer experience is better, the flow will naturally increase, more traffic will attract sellers to sell things online, so that consumers have more and more rich selection, and access to more convenient services, which will further enhance the customer experience. With the growth of the flywheel, Amazon's operating costs will be apportioned, the cost structure will be more reasonable, you can save the money back to consumers to form a low price, which is an important factor to enhance the customer experience.

Supporting the Amazon flywheel is based on the three pillars of customer experience: rich choice, convenience and low price, strong technical capability and data operation is the engine driving flywheel acceleration. In the year that Amazon went public, its partners are AOL, Yahoo, Excite, Netscape, Geocities and other enterprises, most of them are more famous than the Amazon, more large, however, after more than 10 years of long-distance running, some of these internet stars have closed down, some do not show the trend, But the Amazon, which is focused on boosting the customer experience, is becoming more "heavy" and more market-Bezos, as the hope is.

I am sure that if you ask Bezos what kind of business Amazon will be in the future, his answer is like more than 10 years ago in a shareholder letter: The world's most customer experience-centric enterprise.

Then there was his usual burst of laughter.

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