Amazon.com Inc. is an American multinational technology company based in Seattle, focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. PDF

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Amazon is the leading pioneer in the global economy. As a global participant in e-commerce, it has changed the global business process, improved logistics efficiency, and promoted the acquisition, sales and promotion of goods....

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Bachelor of Business Administration

May / 2021

BBED 4103

E-COMMERCE

MATRICULATION NO: IDENTITY CARD NO.

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| E-COMMERCE | BBED4103

TABLE OF CONTENT 2

1.0 INTRODUCTION

3-6

2.0 DIFFERENCES IN AMAZON TRANSCATION B2B AND B2C

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2.1 ORDER APPROVALS AND ORGANIZATIONAL STRUCTURES

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2.2 SALES RESPRESENTATIVES

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2.3 CUSTOMER RELATIONS

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2.4 TYPE OF SALE AND LOGISTICS

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2.5 TERMS AND PRICING 3.0 AMAZON WEBSITES

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3.1 BENEFITS OF OWN WEBSITES

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4.0 ANALYSIS NATUIRE OF E-COMMERCE OF AMAZON

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5.0 CONCLUSION 6.0 REFERENCES

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| E-COMMERCE | BBED4103 1.0 Introduction Amazon.com Inc. is an American multinational technology company based in Seattle, focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is considered one of the big four tech companies along with Google, Apple, and Facebook. Amazon is known for revolutionizing industries through technological innovation and massive expansion. As measured by revenue and market value, it is the world's largest online marketplace, the provider of artificial intelligence assistants, and the cloud computing platform. In terms of revenue, Amazon is the largest Internet company in the world. It is the second largest private employer in the United States. It is also one of the most valuable companies in the world. Amazon was founded by Jeff Bezos in Bellevue, Washington, in July 1994. The company began as an online marketplace for books, but later expanded to sell electronics, software, video games, clothing, furniture, food, toys, and jewelry. In 2015, in terms of market value, Amazon surpassed Wal-Mart to become America's most valuable retailer. In 2017, Amazon bought Whole Foods for $ 13.4 billion, vastly increasing Amazon's position as a physical retailer. In 2018, Bezos announced that his Amazon Prime two-day delivery service has surpassed 100 million users worldwide. Amazon distributes downloading and streaming of videos, music, and audiobooks through its subsidiaries Amazon Prime Video, Amazon Music, and Audible. Amazon also has a publishing department, Amazon Publishing Company, Film and Television Studio, Amazon Studio, and cloud computing subsidiary Amazon Web Services. It produces consumer electronics products, including Kindle e-readers, Fire tablets, Fire TV and Echo devices. In addition, Amazon's subsidiaries also include Ring, Twitch, Whole Foods Market and IMDb. In various disputes, the company has been criticized for excessive technical vigilance, excessive competition and harsh work culture, tax avoidance and anti-competitive practices. Jeff Bezos incorporated the company as “Cadabra” on July 5, 1994. Bezos changed the name to Amazon a year later after a lawyer misheard its original name as “cadaver”. The company

went online as Amazon.com in 1995. Now, the company had employed well 306,800 people in full-time and part-time jobs worldwide. The company has individual websites, software development centres, customer service centres and fulfilment centres in many locations around the world.

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| E-COMMERCE | BBED4103 2.0 Differences between B2B and B2C transactions within Amazon When choosing an e-commerce solution for your online store, you must determine the main differences between B2B and B2C e-commerce to ensure that the platform you choose is the best for your specific business. The choice of e-commerce solutions on the market is very wide, and choosing a suitable e-commerce solution from the spectrum can be very challenging. If you are a B2B company, the most important thing to understand is that the industry has many specific needs and most of the standard e-commerce solutions are difficult to satisfy. This is the main difference between B2B and B2C e-commerce, and these differences will directly affect the choice of online store solutions.

2.1 Order approval and organizational structure: B2C works directly with the end-buyer, without order approval or related special procedures. On the other hand, B2B usually needs to adapt to the entire negotiation and approval process chain, and the e-commerce platform they use must be able to often support up to 10 different roles in the approval process and follow-up orders. Some or all of these roles can be accessed. B2C-centric software usually does not face these challenges, and may not be able to solve such situations quickly. The ownership of the sales process within the organization is also different between B2B and B2C. B2C sales are usually managed by the marketing department, which involves IT and operations departments. In B2B, operations and IT are the main owners of the processes, which makes the main difference for us in building relationships with buyers.

2.2 Sales Representative B2B department is focused on establishing long-term partnerships. This is another specific factor that does not currently exist in B2C e-commerce which focuses on the use of real salespeople who work directly with customers. It's safe to say that today, no matter what business area they are in, most people prefer to order directly online rather than talking to a salesperson. Naturally, B2C e-commerce has quickly adapted to this new reality, and now direct selling professionals have disappeared. Even more naturally, the rest of the sales staff see e-commerce as a huge threat. However, in the B2B industry, given its detailed information, sales representatives are still vital to establishing and 3

| E-COMMERCE | BBED4103 maintaining partnerships. With this setup, online shopping is actually a boon, not a threat, and they are very helpful in eliminating regular orders and focusing your sales team on the most important tasks. For complex transactions or large orders, B2B buyers still want to talk to a salesperson. Therefore, now the field sales staff can truly devote their energy to their main goal that is building relationships, rather than regular order takers; and, if they can still get paid for their customer base, then they will no longer feel threatened by the new technology, and the new technology still has obvious positive significance for the seller and the company. In order to make routine orders for customers quickly and conveniently without affecting sales representatives, the e-commerce solution needs to take into account the following two aspects: a convenient online ordering system and a method for tracking and linking specific sales personnel’s orders inside the company. Also, when a salesperson is involved, they must be able to adapt to more complex interactions.

2.3 Customer Relationship When talking about the difference between B2B and B2C e-commerce, the key question is "Why are we doing e-commerce in the first place?" What is the main objective? The answer will vary by retail sector. B2C tends to focus on acquisitions. The main goal here is to attract more customers and sell as many products as possible. The number of products that can be marketed to as many potential buyers as possible. In B2B, priorities have changed significantly. Here, the number of sales is in large number of products to the same buyer, so the first task is to retain that buyer. Establishing and maintaining longterm partnerships is essential for providers that focus on B2B. Another important point is that the buyer in B2B is usually not the final consumer, but the purchasing agent, who is specially trained to make purchasing decisions. Based on this difference, B2B ecommerce requires simple and easy-to-use tools, including powerful multi-store support; flexible catalogue classification; scope-based security related to catalogues and many other B2B-specific features, and in contrast, the B2C department usually prioritizes eyecatching websites in order to attract as many potential customers as possible.

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| E-COMMERCE | BBED4103 2.4 Sales and logistics types As from previously determined, when it comes to the main differences between B2B and B2C business sectors, sales types and relationships with customers are key points. In B2C, you market the same product to a large number of customers, while in B2B, you sell the product of each pallet to the same customer. This requires different logistics and different ways of organizing transportation processes. Therefore, the e-commerce solution must be able to handle this difference. For B2B e-commerce, it is very important to have a well-structured system, where returns, concerns, etc. could come through measurable channels, which can be applied in measurement and analysis. Shipping and tracking should also accommodate larger quantities on fewer order items.

2.5 Terms and price As mentioned above, an Amazon-like experience is very suitable for B2C. Everyone gets the same product range and price for every item. Then they pay for the order with a credit card, and the payment is good to go at this time. However, as mentioned above, B2B must be able to consider customer relationships. This applies not only to product classification, but also to the terms and prices of the association. In addition, B2B vendors must support other ordering and payment methods that are not required by B2C that is credit checks, credit account status, etc. When working with customers who order a large number of products, B2B suppliers will naturally negotiate different prices with different buyers that is based on many factors, such as purchase volume, customized orders, customer loyalty programs, etc. Therefore, unlike B2C e-commerce software, where the necessity is to set a price that applies to everyone where as B2B e-commerce solutions must be able to be used with negotiated and contract-based price adjustmentsreaching an agreement with the customer specific terms. In short, in B2B and B2C e-commerce, the volume and transactions, customer relationships, and sales types are completely different. These differences bring a unique set of requirements for B2B companies, which makes it more difficult, if not impossible to adapt to customizable B2C-centric e-commerce solutions through personalization which meet the needs of customers. B2B requires its own set of tools and settings to easily use e-commerce solutions. Finally, the most obvious similarity is that there are 5

| E-COMMERCE | BBED4103 people on both sides of these two e-commerce models. Trade-based relations between people have been developed for hundreds of years. Now, its appearance has changed, but its essence remains the same.

3.0 Explanation of the benefits of Amazon having its own website One of the latest additions to the Amazon’s repertoire is a subsidiary company called Amazon Services. Amazon sells its sales platform through Amazon Services and provides a complete Amazon e-commerce software package to companies that want to build or update their e-commerce business. Amazon set up Amazon’s software and technology to establish a comprehensive website and technical backbone for other e-commerce companies. For example, in addition to having a store on Amazon.com, Target also uses Amazon Services to build and manage its own e-commerce website Target.com. The associates can also take advantage of Amazon Web services, which allows people to use Amazon utilities for their own purposes. The Amazon Web Services API (application programming interface) allows developers to access Amazon's technical infrastructure to create their own applications for their own websites. All product sales generated by these sites must go through Amazon.com, and employees receive a small commission for each sale. On the following discussion will view insight on how all these programs and channels come together to create a sales and marketing powerhouse.

3.1 Benefits of own websites The beneficiaries of own websites are broad as the prospective brands can evaluate their potential on Amazon before entering the job market and gain the knowledge necessary to understand and predict their brand's trajectory on Amazon. This information allows brands to decide whether their partnership with Amazon is worthy of Amazon’s imminent influence before experiencing the consequences first-hand. In addition, because of the established partnership with Amazon, today's brands can better predict their future and develop strategies to determine their direction of development. Using this tool, brands can take the initiative to regain some of the control they gave up when joining the site. Lastly, this tool can promote the longevity of Amazon and improve awareness across the company. If brands can protect themselves from brand dilution, Amazon can retain the 6

| E-COMMERCE | BBED4103 security of brand leverage to further their success. In addition, this new focus on transparency has increased consumer valuation and the Amazon brand. Once the accountability system is in place, both consumers and brands will have the support of the company, and will remain loyal to the company and contribute to the long-term success of the company. Therefore, Amazon has a responsibility to actively attempt to have a positive impact on its business partners and consumers; this tool is a step in the right direction. Online retail is Amazon's playing field, and it clearly sets the rules. The breadth of the company is equal to that of no previous company, so the overall impact of this huge and competitive force cannot be determined.

4.0 The Nature of E-commerce communication within Amazon At the first glance, Amazon's business structure can easily be called "e-commerce." In fact, this is how company representatives and others generally rank Amazon and its namesake website. But over the years, the company has expanded to services beyond the strict scope of e-commerce. As Amazon develops and grows in the ever-changing global market, some even say that Amazon is not a trading company at all. Currently, there are more than two million third-party merchants selling on the Amazon platform in more than 100 countries, and this number has doubled in the past ten years. Of all the products sold on Amazon last year, more than 40% were sold by third-party merchants, a total of about two billion products, twice the number of products sold on the platform in 2013. Indeed, the selling on Amazon's third-party platform involves costs as Amazon collects the percentage of each item sold. Although most Amazon third-party merchants pay between 8 percent and 15 percent, the fee ranges in-between 6 percent and 50 percent. However, this fee is not the only fee for becoming a third-party Amazon merchant. Due to the nature of the company's unique business model, Amazon's thirdparty merchants often find that Amazon is not only their partner, but also their biggest competitor. In short, commerce business is buying and selling activities, especially largescale buying and selling activities. When a company's sales platform allows the customers to buy its products electronically while online, thus it can be said with certainty that it is an electronic commerce company or an e-commerce company. As of publication date, Amazon not only fits that description, but is also the epitome of it as the 7

| E-COMMERCE | BBED4103 company is the largest online retailer in the world. Personalization Given its enormous commercial nature, Amazon offers surprisingly personalized services. This service is similar to the traditional service found in a traditional store, at the time, the merchant knew that their customers were individual dependents, so they could provide tailor-made services for everyone. Amazon does this electronically by tracking the online behaviour of customers on the Amazon website and providing recommendations to customers based on this information. In addition to business-to-business online retail, Amazon also enters business-to-business commerce. Amazon provides other companies with its business operations, such as its warehouse, packaging, transportation, advertising, and payment services. Therefore, Amazon is also in the business of "delivery", helping other companies take care of their customers from the sale to the delivery of the products. According to the Bloomberg article "Amazon Sets New Highs in Global E-Commerce Growth," the company revealed in 2013 that in the most recent quarter, third-party sellers accounted for 4 percent of products sold on Amazon.com. In addition to the aforementioned fulfilment services, Amazon also has a large cloud infrastructure that can be rented to companies that need data storage space. Amazon also provides access to its Internet server, thereby providing companies with more computing power. In addition, Amazon has pioneered the publishing industry with its Kindle e-reader and e-book sales. For these reasons, some people regard Amazon as a data company first and retailers second. But, perhaps in general, we can say that Amazon has been an e-commerce company since its beginning and is expanding to include other forms of commerce. It requires a well-thought strategy, creative marketing, and a real investment in time, energy, and resources to compete with the company and in fact, Amazon is no longer a shortcut to making money. But for loyal salespeople, this can lead to great sales and make business thriving.

5.0 Conclusion Inconclusively, there is no question that Amazon.com can serve different markets under different conditions. It has been rapidly expanding its global business while providing access to infrastructure, technology, etc. Amazon has adopted various strategies to achieve its sustainability and has launched fierce competition in some countries such as 8

| E-COMMERCE | BBED4103 China and India. Its online marketplace business model has achieved great success in other regions of Asia, Europe, North America and South America. It fits into its "vision and mission" statement, that it is the most customer-centric company on the planet, establishing a place where people can find and discover any product they want to buy online. There are many business opportunities in developing countries. For example, the countries of Eastern and Central Europe have joined or will join the European Union or the BRIC countries: Brazil, Russia, India and China. They are considered the fastest growing markets, and Amazon.com should enter or invest heavily in these countries. Amazon's strong logistics alliance ensures that the company can deliver its products quickly and safely to new customers. The company also have been testing delivery via drones. As matter in facts, it has shown that Amazon is the leading pioneer in the global economy. As a global participant in e-commerce, it has changed the global business process, improved logistics efficiency, and promoted the acquisition, sales and promotion of goods. Similarly, e-commerce has helped millions of consumers through low prices, high competition, ordering and fast shipping. The companies whether large or small in multiple industries rely on e-commerce applications to survive and compete in local, national and global economies. Amazon has been adapting to possible changes in this dynamic environment, from Web services, distribution and warehousing centres to logistics barriers, leading videos and more. The company is now one of the largest and most powerful technologies in the world.

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6.0 Reference Annual report 2017. Seattle, Washington: Amazon. April 4, 2018. Retrieved May 22, 2021.

"Form 10-K". Amazon.com. December 31, 2018.

"California Secretary of State Business Search". Businesssearch.sos.ca.gov.

"Amazon bought Whole Foods a year ago. Here's what has changed". Yahoo! Finance.

"Amazon.com, Inc. - Form-10K". NASDAQ. December 31, 2018. Retrieved March 23, 2021.

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