Amazon - the retail champion of 2020
If you’ve never shopped online at Amazon.com, you must be living under a rock! I’ve got some friends who Amazon.com knows on a first-name basis! Just in case you have indeed been living under a rock, here’s a little history on Amazon.com. In 1994 Jeff Bezos, a former Wall Street hedge fund executive, incorporated Amazon.com, choosing the name basically because it began with the first letter of the alphabet and because of its association with the vast South American river. Based on research he had conducted, Bezos concluded that books would be the most logical product initially to sell online. Fast-forward 27 years and Amazon is winning the e-commerce sector by miles. So much for selling books!
Barring supply chain challenges due to Covid-19, Amazon has managed to up its game due to the surge in online shopping and streaming during the pandemic, so much so that it is expanding its aerial network and purchasing 11 planes to maintain its delivery system! Yup…eleven planes! Clearly, its rise during this unprecedented global crisis has got to be one of the biggest economic success stories of 2020!
What makes Amazon so special?
To give you a snippet of the kind of economic success I mean, check out the stats below:
- Amazon now employs over 1.2 million people globally – an increase by 50% since 2019. How many companies do you know of which actually recruited in such quantities during the pandemic?! Many had to shut their doors, laid off or furloughed.
- It added over 427K staff in the first 10 months of 2020 – from the beginning of the pandemic and during the most critical periods of globally increasing Covid-19 cases.
- Amazon is also spending US$2 billion to build 20,000 affordable homes for low-income families. They certainly know how to walk the talk. Great public interest piece that can only enhance its reputation and brand recognition.
- They have also entered the healthcare industry and sports broadcasting. It is bidding for rights to the England-Australia Test cricket series. Success in ‘The Ashes’ will make it one of the biggest competitors of Sky Sports, Europe’s leading sports broadcaster. Talk about diversification! Amazon has got it down to a science!
- When the pandemic began, Amazon increased hourly pay by $2 an hour and doubled overtime pay. These pay increases were extended twice by May 2020. Did I mention that Amazon’s starting salaries are higher than its retail rivals? So in essence, while thousands of employers were downsizing, Amazon was adding to its employees’ pay packets, while also spending US$800 million on Covid healthcare precautionary measures in the first half of 2020 alone.
- Amazon has also expanded into new sectors. In December 2020, it became the largest purchaser of renewables with 26 solar and wind energy projects. Sustainability is the new buzz word and Amazon is certainly keeping one step ahead in its positive environmental reinforcement. Another plus for the brand.
- A daily average of 2,800 jobs added since July 2020, which could mean at this rate that it could pass Walmart as the world’s biggest private employer by 2023.
Oh...and just a piece of interesing info, having seen 34% growth in the last five years, CEO Jeff Bezos is on course to be a trillionaire by 2026! Cool stuff huh?!
Dark days ahead? Maybe not…
However, it has not all been sunshine and roses for the e-commerce giant. There have been reports of tens of thousands of Covid-positive tests and several deaths. Reports say that Unions representing the workers plan walkouts to protest against inadequate sick pay. Additionally, word on the ground is that several law suits might be in the offing as some staff are accusing the company of ‘purposeful miscommunication with workers, sloppy contact tracing, and [instilling a] culture of workplace fear’. Some sources also reveal that Amazon Canada’s vice president stepped down citing the firing of whistleblowers as the reason for his exit. While Amazon.com may have been a saviour of sorts for millions during the quarantine periods, and thousands of affiliates have enlisted in their affiliate programme in spite of their low 6-10% commission rate, Amazon may be in for some rocky months ahead, if the safety of its workers are at risk. Neither its reputation nor its rising revenues can help that.
I’m interested to hear if it’s the Amazon reputation and the exposure to millions of products that attracts affiliates in spite of the low commission rates. What’s your take?
Cheers!
Maria
Recent Comments
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Hello Mike. Thanks for that valuable information. Amazon's major attraction, like you said, is that it's a big brand that is a household name - it will work for many affiliates just as you mentioned using them for product availability in your niche. Interesting info on the commission rates though. Cheers!
Maria
The commission rate dropped recently in Amazon to over 1/2 and lower on some items. You have to have 3 sales within 180 days or they will boot you out. That happened to me but I was allowed to sign back up.
I use them partially because some of the products in my niche do not have an affiliate program so I use Amazon to make the item available for purchase.
The good news with Amazon they are a household name and many customers trust their service.
Be safe
Mike
Anytime a company is wildly successful it becomes a target. They have worked through many issues that have put them on top in terms of HR, shipping, ordering, diversity etc. The nature of their business model has meant a very strict affiliate policy, but my experience it seems to be a wonderful forward thinking company.
They couldn't have gotten this far if they weren't a step ahead of the competition. I mean from books to millions of products and diversification out the wazoo! Clearly Bezos and his team have the formula and of course strict affiliate policies allows them to protect their brand as well. Thanks for reading. Cheers!
Maria
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Amazon has a history of treating affiliates very poorly. From cutting commissions without warning to 25 different reasons to remove someone from their affiliate program, they are horrible to work with.
I also don't respect a company who watches other companies do well on their platform, then turns around and produces the same product cheaper to undercut the original supplier. That's why Amazon is expanding into so many new industries. They've got the money and the power to do it, and merchants be dammed. Amazon is just an unscrupulous bully.
Bezos doesn't care at all about anything but making more money. Their attempt at appearing like a company with a conscience is a joke. While Amazon brags about using electric cars, they work hard to distract attention from the millions of boxes they use every day.
I have no use for Amazon.
Thanks for sharing this perspective of Amazon. I always say whenever something appears too good to be true..it probably is. They are THE mega retailer and spends billions on brand. Ultimately, there's usually a down side and someone's gotta pay the price for the success. Thank you for reading and contributing. Much appreciated.
I agree, Jeannine!
Jeff