The following is an excerpt from coursework I did analyzing and explain Search Engine Marketing and Web Metrics. The report analyzes and makes suggestions about one of eBay’s competitors, Amazon.com, based on observations, and should be taken at face value. It is meant to be an example of possibilities.

Amazon.com Homepage

Amazon, one of eBay’s global competitors has been in business just a little bit longer than eBay. Started in 1995 by Jeff Bezos and two other friends in his garage, Amazon has become an incredibly large company, reaching sales of almost $150 million by 1997 (Rivlin, 2005). Originally concentrating on books, Amazon has managed to branch out into many other products and even launched its own product, the Kindle, a reader for electronic books. (Stone, 2008),

Amazon’s history has been a mixed one, while having incredibly large sales figures and grown at an enormous rate, they didn’t turn a profit until 2003 (Rivlin, 2005). It wasn’t in Jeff Bezo’s plan to have a profit on the first year of operations though, the founders expected not to turn a profit for 4-5 years. (Stone, 2008), It managed however, to turn a profit and remain in business in a time when the dot com bubble was bursting and companies were going under.

Amazon has moved from selling books, to selling all kinds of items, and to enabling users to make sales for themselves. Amazon has also purchased other companies like IMDb (Bloom, 2008), or the Internet Movie Database. It would seem though that its core product has been books. Though the Internet age has been changing the printed media industry, Amazon isn’t resting on solid sales of these items to last forever. The forward looking company has its e-Reader the Kindle. According to Amazon’s web page on the Kindle, the e-Reader can wirelessly download and purchase books with many titles being available for $9.99.

Financial and Sales Information for 2007 from the Annual Report
Nate Sales: $14.8 billion
Net Income from Operations: $655 Million
Earnings per share: $1.15
Total Assets: $6.8 billion
Long-Term Debt: $1.2 billion

Site Audit

What’s Working
Ad Sales: Amazon sells ads to users who have items to be purchased.

Amazon Kindle: Users can purchase the device from Amazon, as well as content from Amazon.

Recommended Items: Amazon’s homepage lists several things, but it targets frequent users based on their viewing habits and past purchases. When users who haven’t even registered for Amazon, they still get items suggested to them. When users register and purchase things, they get recommended items based on their past purchases. It is a move to decrease below-zero customers, and to retain and extend most-valuable customers.

What isn’t Working:

Sharing Ideas: Mr. Bezo’s runs the show at Amazon, not allowing others to offer different marketing strategy maybe a critical flaw at Amazon. New Marketing executives have been brought into make changes but executive turnaround is high at Amazon. (Rivlin, 2005)

Amazon Kindle: It’s rare that a marketplace has its own device, and is projected to sell 380,000 units in 2008. However, Amazon isn’t taking full advantage of users to buy things other than books. There is also a problem with the device; it’s strictly black and white. While it may work for reading news papers and books, it doesn’t lend itself well to reading more colorful magazines. Recently, the Kindle has announced a new Kindle. Due out February 24th, The Kindle 2 promises to be an improvement on the original Kindle in battery life, design, and display but still falls victim to the same aforementioned flaws of the Kindle.

Suggestions

Capitalize more on the Kindle: A big selling point of the Kindle, according to the site is that most titles on the Kindle are $9.99. However, a lot of text books for colleges aren’t even available for the Kindle. For example, Internet Marketing: Strategy, Implementation and Practice is not available on the Kindle.
Summary

Amazon, like eBay will let sellers place ads on the site so that sellers can market their product and hopefully sell it, and encourage them to sell more items. This marketing strategy is effective because it increases the amount of money being paid to Amazon. They are capitalizing on sales, and ads for those sales. In turn the ads will increase private sellers luck and increase the odds they will sell something else. (Amazon Ads, 2008)

Like eBay, users of Amazon.com can buy and sell through the website. Similar to eBay, fees range from 8-15% with a few categories, to 20% with some categories like groceries. Some items, like books and movies are subject to a closing fee of $.80 to $1.35. However, unlike eBay, Amazon doesn’t do auction style. Amazon is more geared towards selling for businesses than people. Although both places have the ability offer businesses their own storefront, Amazon offers the ability to handle fulfillment. Company’s can send product to Amazon, who will store and ship orders for you. (Sell Your Products on Amazon, 2008)

References:

Amazon. (2000, February 2). Amazon.com Book Store Continues to be the Best Place for Book
Lovers, as Fourth Quarter 1999 Results Strengthen Retailer’s No. 1 Ranking.
Amazon.com Press Release .
Seattle , Washington.

Amazon.com. (2008). 2007 Annual Report. Seatlle, WA.

Amazon, (2008). Amazon.com: Kindle. Retrieved November 22, 2008, from Amazon.com Web
site: http://www.amazon.com/Kindle-Amazons-Wireless-Reading- Device/dp/B000FI73MA

Amazon Ads. (2008) Retrieved November 20, 2008, from Amazon.com Website:

http://www.amazon.com/gp/seller-account/mm-summary-page.html?topic=200260730&ld=AZAdvertiseMakeM

Amazon.com (2008) Sell your Products on Amazon. Retrieved November 20, 2008, from

https://www.amazon.com/gp/seller-account/mm-product-page.html?ld=AZSOAMakeM

Chaffey, D., Ellis-Chadwick, F., Johnston, K., & Mayer, R. (2008). Internet Marketing:
Strategy, Implementation and Practice. Harlow, England: FT Prentice Hall.

Rivlin, G. (2005, July 10). A Retail Revolution Turns 10. Retrieved November 20, 2008, from
The New York Times Online:

http://www.nytimes.com/2005/07/10/business/yourmoney/10amazon.html?ei=5090&en=c805d53acf76f2b3&ex=1278648000&partner=rssuserland&emc=rss&pagewanted=all

Stone, B Amazon.com. (2008, 3, 28). The New York Times Online, Retrieved November 20,
2008
from http://topics.nytimes.com/top/news/business/companies/amazon_inc/