A Very Brief History of Amazon: The Everything Store

Amazon is an internet behemoth today. But where did it all begin?
Christopher McFadden

In terms of revenue, Amazon is the biggest internet-based company in the world. When it started out selling books online in 1994, Jeff Bezos had an idea that the best way to succeed online was to grow big and fast.

Today, the company sells everything from books to groceries to shipping container houses. It has become a one-stop-shop and has many ambitions for its future

Here we explore Amazon's earliest days and highlight some of the company's most important milestones. We will also attempt to explore why the company became so popular. 

When did Amazon start and when was Amazon founded?

Amazon, or more correctly Amazon.com, was first incorporated by Jeff Bezos in July of 2005. At the time, he was a Wall Street hedge fund executive.

Amazon was originally to be called Cadabra (from Abracadabra). But Bezos' lawyer advised him that the reference to magic might be a bit too obscure.  

Also, when people heard the name on the phone, they all too often heard "Cadaver" instead — not ideal. 

history of amazon bezos
Source: James Duncan Davidson / Flickr

So, Bezos and his then-wife MacKenzie Tuttle started to register some domain names for their potential new venture. 

Bezos soon registered the domain names Awake.com, Browse.com, and Bookmall.com. He also registered the domain name Relentless.com and kept it. In fact, if you type that into your browser today, you'll be redirected to Amazon.com.

After scrolling through a dictionary for some inspiration, he hit on the word Amazon. Bezos thought this was particularly fitting as he envisaged his online store becoming the biggest in the world — much like the Amazon is one of the biggest rivers on the planet. 

This is the philosophy behind why Amazon is commonly called the everything store today. 

Amazon.com was registered on the 1st of November 1994. Name sorted, but what to sell?

At the time he knew he wanted to build some form of an online retailer but wasn't sure what to sell. After some research, he settled on books.

They were relatively easy to source, package, and distribute. 

the history of amazon
Source: jetcityimage/iStock

Amazon was not the first company to hit on this business strategy. Another company, Computer Literacy (a Silicon Valley bookstore) began selling its own wares online as early as 1991.

The difference that Amazon.com had to offer was its greater convenience. It, from the off, was based on a model of delivering online orders directly to the customer's address anywhere in the world. 

As we all know now, Amazon.com is about a lot more than just books today. This was always the plan, according to Bezos

He contended from the company's very beginnings that Amazon was not just an online retailer selling consumer products. Bezos envisaged the company being a technology company at heart whose real business was to simplify online transactions for its customers. 

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When did Amazon start selling things other than books?

As we have already seen, Amazon started out selling books online. This was groundbreaking for the time and very few companies were providing the level of convenience that Amazon.com had to offer. 

history of amazon prime
Source: QuoteCatalog/Flickr

But, when did it start selling other products?

After following Bezos' initial business plan, the company expanded into selling computer games and music in 1998. At about the same time, Amazon also expanded its services internationally by purchasing other online bookstores in the UK and Germany. 

By the turn of the Millenium, Amazon had further expanded into selling consumer electronics, video games, software, home-improvement items, toys, games, and much more.

By the mid-2000s, Amazon had launched its Amazon Web Services (AWS). This innovation fitted well with Bezos' initial ambition to make Amazon a tech company rather than an online retailer exclusively. 

By 2006, Amazon expanded its AWS portfolio with its Elastic Compute Cloud (EC2). This was followed up by their Simple Storage Service (S3) soon after. 

The company's expansion into digital services like EC2 and S3 would boost the company's revenues significantly. Today, they remain the bulk of the income for Amazon Web Services.

when was amazon founded
Source: 4kodiak/iStock

2007 saw the unveiling of the first Kindle e-readers. These relatively low-cost handheld tablets would invigorate the e-book market, and by 2012 the Kindle would constitute around 50% of all Android-operated tablet sales. 

The Kindle's success led to Amazon entering the e-book publishing market in 2011 with its Amazon Publishing service. That same year Amazon announced that e-book sales on its site were outselling traditional printed books. 

Since then Amazon has continued to expand into many other services. These include shipping fresh produce, drone delivery, and many more innovations. 

Amazon has even recently begun operations at their very own airport.

When did Amazon start becoming popular and when did Amazon go public?

At the time of its founding, many of Bezos' peers and other critics voiced their skepticism about his proposed business model. Financial journalists were some of the most vitriolic and often disparaged the company by referring to it as Amazon.bomb. 

Many of them claimed that Amazon.com would ultimately lose out to more established bookstores. Especially those that were already following suit and starting their own e-commerce sites. 

The very fact that Amazon.com didn't become profitable until the final quarter of 2001 didn't help things. But Bezos stayed firm and dismissed his naysayers as people who simply didn't understand the potential for the business. 

Bezos argued that in order to succeed as an online retailer, Amazon would need to "Get Big Fast." And grow it did.

By December of 1996, the company's customer base had grown to an impressive 180,000. By October of the following year, this figure had leaped to around 1,000,000 registered accounts. 

Revenues had reached around $148 million in 1997, a significant jump from around $16 million in 1996. 

history of amazon
Source: Seattle City Council/Flickr

Up until this point, Amazon had remained a private company. But Bezos soon realized that he would need more than just private investment to sustain the company's growth.

And so, in 1997, Amazon.com went public and managed to raise an eye-watering $54 million on the NASDAQ exchange. In addition to the cash, the company was able to use its stock sales to fund its aggressive growth and acquisition strategy.

By 1998, Amazon's revenues had reached an impressive $600 million. 

Amazon's meteoric rise in such a short time frame catapulted Bezos into the public eye. He was also chosen to be Time magazine's 1999 Person of the Year

history of amazon time
Source: Amazon

At around the same time, Amazon launched its now highly lucrative Affiliate program

By joining the program, other companies advertised Amazon's merchandise for sale on their own platforms. Amazon would then fulfill the order and pay a commission — win, win. 

The program proved to be a savvy business decision. It grew from one Associate in 1996 to well over 350,000 by the close of 1999. 

How does Amazon use technology to increase efficiency?

Apart from its near-universal appeal as a kind of one-stop-shop, Amazon has also taken advantage of the latest technological innovations to increase its efficiency and service to its customers. 

From the use of AI to handle and process orders or recruit to experimenting with drones and robots for order fulfillment and delivery, Amazon is certainly not afraid of testing out the latest innovation in tech. 

This approach, however, been both good and bad. 

For example, a machine-learning recruitment tool the company adopted, though apparently was not used in the final decision process, was later shown to have an apparent bias against certain groups of people for software developers and other technical positions. Once the issue was discovered, Amazon duly canceled the product.

Amazon has also adopted automated processes for firing, as well as hiring. Such systems have been criticized for making decisions without being able to take into consideration all factors — like issues in someone's personal life, etc. Software solutions, like Amazon's "Anytime Feedback Tool", for example, enable staff to either praise or criticize their coworkers. 

amazon robots
Source: JBLM PAO/Flickr

This same software also tracks an employee's performance against set Key Performance Indicators (KPIs) whilst handling orders from customers. While mistakes do happen and are expected, Amazon has been criticized for the pressure it appears to be putting some of its warehouse staff under — even claims that staff can be automatically fired should their performance be deemed unacceptable. 

However, it is important to note that Amazon wholeheartedly denies such practice. 

"It is absolutely not true that employees are terminated through an automatic system. We would never dismiss an employee without first ensuring that they had received our fullest support, including dedicated coaching to help them improve and additional training," an Amazon representative told MIT Technology Review

Amazon has also been adopting more and more automated solutions to increase efficiency in its fulfillment centers, like the use of robots to find and retrieve items. However, for the time being, at least, human workers are still a key part of Amazon's delivery service — especially when it comes to packing items and dealing with customer service.  

What made Amazon so popular?

The main appeal of Amazon in its early days was one of pure convenience. No longer did a potential customer need to visit a physical bookstore to get the book they were looking for.

The ability to search, select and purchase a book from the comfort of your own home was an amazing innovation at the time. Not only that, but Amazon would deliver your purchase to your front door within days.

future of amazon
Source: Amazon News/YouTube

The very fact that they began to offer more and more different products only broadened its appeal to more and more customers. But it wasn't really about the goods they were selling. 

Amazon's success owed, like many other successful companies, to the service that they offered. This gained them significant customer loyalty, and as a result, big profits in the long run. 

Another innovation Amazon made for its customers was its recommended product function. By offering other products to upsell, based on the customer's previous purchases, Amazon was able to increase its revenue even more.

The addition of customer reviews of products also helped to foster a kind of "customer community" that made the site, and its wares, more appealing to potential new customers. 

In recent years, Amazon has reached new heights, like becoming the second-ever $1 trillion market cap company in history (Apple got there first, believe it or not). After announcing, and then canceling plans to build its second HQ in New York following political pressure, Amazon would see record growth during 2020.

what is the future of amazon
Source: Amazon blog

With many people stuck at home during the pandemic, Amazon, and other online retailers enjoyed something of a field day. 

The most recent major news in Amazon's more than 25 years in business, was the announcement that Bezos has decided to step down as the company's CEO as of fall 2021. How the company will perform with Bezos not behind the wheel is yet to be seen, but if past performance is anything to go by, it is bound to be a highly successful one. 

That is, of course, unless calls to break up Amazon gain serious traction in the public eye. As they say, time will tell. 

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