Key success factors for Amazon.com: Amazon Vs. Ebay Essay.
Factors beyond Amazon.com global acceptance and success can be categorized into 4 categories: offering competitive prices, straightforward web design and friendly interface, convenient payment system, and most importantly the unique shopping experience.
1.Price: Amazon differentiates itself mainly on the basis of price and by making sure that it offers the same quality products as any other company with a noticeably lower price. In addition, sellers do not pay any fees for product listing and it cost nothing until the product is sold.
In order to make this happens, Amazon.com is doing great effort with wholesalers and tends to “connect to resources that give it scale rather than adding internal physical mass.” The online bookstore allows lesser geographical constraints and easier expansion. According to John Jordan, Amazon is roughly 10% cheaper than a physical retailer with more cost saving with order size. Independent sellers or affiliates play a major role in selling the products and they constitute about 40% of the entire sales.
2.Web design: Amazon is considered an undisputed leader in online shopping with a well defined website. The organized visual hierarchy, page organization, and friendly interface and layout allow easy navigation and enjoyable shopping. Amazon believes in customer differentiation and consumers easily recognize and differentiate Amazon.com experience from others. Personalized shopping experience is on of a kind in which users get recommendations and summary related to the user’s interest and purchasing or search history.
3.Convenient payment: all payments are handled securely by Amazon.com itself. Sellers do not have to establish different payments account as in eBay and Paypal. Amazon.com provides a convenient “1-click” ordering that allow customers to make purchases without getting into the hassles of other online checkout payment systems.
4.Extraordinary convenient shopping experience:Wide selection: being exclusively online, Amazon was able to provide access to 1.5 Million new books and about 1 million used ones. This is estimated to be 100 times the size of typical mall bookstore. Moreover, Amazon expanded into a variety of categories beyond media.
Search inside: one great feature is the easy access to the catalog via web services by the “search inside the book” to help users to search for a keyword inside the text. Amazon cooperated with around 130 publishers for this service.
Reviews: The ability for people to rate products and leave reviews worked as an important highly influential tool.
EDoc: this new feature allows customers to have their document viewed electronically on screen. Customers do not have to pay for shipping or handling.
Customer service, support, help: although the buying or selling procedure is usually trouble-free, the website provides rich amount of online help and FAQ system.
eBay.com•Auction concept: while eBay is an internet-based business model and share many strategies like Amazon.com, eBay is an auction model and it does not sell any product that it owns. Instead, it facilitates the process of listing selling items, bidding process, and payments.
•More flexible: items are endless and not limited to any specific category like just books or media. The range of items from as big as airplanes to as tiny as a laser pointer. Additionally, eBay give sellers the flexibility to sell a collection of things and packages.
•Large number of bidders: easy access, friendly website, and the potential of winning the bidding and getting the product in a lower price produce a humongous amount of bidders.
•Large number of sellers: Large numbers of bidders attract sellers. In addition, the uncomplicated process of selling items allowed many users to be involved in selling.
•Large traffic: Social interaction involved in the bidding process is very high as bidders wait and revisit multiple times to check the bidding status. The development of loyal customers allowed eBay to record traffic in November ’07 way higher than Amazon.com (80.5 M visitors and 60M respectively).
1 Alan Wolf (2006, June 19), Staples strategy: new branding, more stores, Twice, Pg 16.
2 Maribeth Kuzmeski (2008, March 3), Your brand defines you, National Underwriter. Life & Health, pg 18.
3 Robert Faletra (2003, April 7), If you don’t brand your business, someone else will-and take your customers, Sciences Module, pg 82.
4 Stephen Marvin (2007, December), From Branding toward values, Information Outlook, Pg 34.