Reference no: EM131820445
Amazon's supply chain management has an edge over other companies because of the shopping experience the company offers. It also has supply chain and fulfillment capabilities and popular pricing strategies. Another advantage of Amazon is that it manages and ships it's own inventory and the inventory of other companies like Eddie Bauer and Target. These traits have given Amazon an economy of scale that surpass its competitors. Amazon can ship about 10 million products compared to the 500,000 that Walmart ships.
Amazon launch in July 1995 as an online vendor. Logistics, shipping and great supply chain management have combined to make Amazon a leading merchandiser of everything from gourmet food to apparel to electronics. The company has also built a reputation for books and music. Amazon has one of the best customer experience as a business because it was one of the first companies who introduced the rating system. The rating system is a way for customers to rate the service that they received from the vendor. This is important because the system creates a way for the best vendors to do business with Amazon. The best venders can have a five star rating while the poor one's can be rated at a two or three. The pricing strategy of Amazon is very effective because there are many venders selling the same product. Some of these vendors end up competing with each other and this usually results in reduce pricing for the customer which is a great advantage.
There are many companies on the internet and none of them has a shipping method like Amazon. Amazon ships products for many different companies. Today, Amazon is a leading merchandiser of everything from gourmet food to apparel and electronics. Books and music has surpassed all categories of merchandise because they are what Amazon has become well known for now. It has a large economy of scale because it this action. No other company can compare with Amazon's economy of scale. A company need's an edge over other companies to stay ahead and Amazon has many traits that give it an edge. This is the reason that Amazon is able to ship so much more products then any other company. 75% of the income of Amazon come from it's sales of electronics and other merchandise and other marketing ventures.
Amazon's supply chain success comes from it's operating philosophy, which is more like industrial manufacturing rather than traditional retail. For example, Amazon takes a six sigma approach to it's distribution operations. Amazon applies lean manufacturing and Total quality management methods to its processes. Amazon's supply chain is so great that major brick-and-mortar retailers like Target Corp, Borders and Toys "R" uses Amazon's website for their e-commerce efforts. Amazon conducts its business on an international scale. The company ships to almost 200 countries. Amazon recently started using a global trade management solution to provide customers in more than 40 countries details on the full cost of orders, which includes country- specific duties, taxes, tariffs and also licenses.
Amazon will continue to be a force online because E-commerce is growing. They have one click shopping and all your information is on file with recommendations of other items to purchase. Because Amazon starting adopting these tools before other on-line companies, Amazon has created a way of enticing the shopper to buy more items every time. Using a technique called drop shipping, Amazon has a real time connection to manufactures that ship goods directly to consumers on the internet on the company's behalf. Amazon can offer 10 million items while they may not have all of them on- stock. All the company has to do is forward an order to a manufacture, which would get the order to the customer. Amazon usually keeps the most popular products in inventory, but the use different techniques to deliver the goods. Amazon's biggest threat now is google, who wants to be the new gatekeepers of e-commerce. Only the future will tell who will succeed. Right now, Amazon firmly has the e-commerce market.