Stefaniy Martynenko

Amazon: the story of Amazon’s creation and success

– But we can’t sell a NEGATIVE number of books!

– We’re ahead of the curve, but that doesn’t give us an advantage to postpone the launch.

This is what the founder of Amazon might have said to one of his employees in 1995. Although the company was officially registered in 1994, the start of online sales was somewhat delayed, and it was not very successful: customers could order minus one book, pages took a long time to load, often hung, and hyperlinks did not work.

But neither the author of the project, nor the staff, nor the users were upset by this.

An online store of this format in 1995 was, if not a breakthrough, then certainly something unusual. It was back then when the 32-bit Pentium microprocessor was considered a powerful “machine”, and there were still 2 years left before the first clamshell phone model was released.

Thus, one of the world’s largest marketplaces started as a modest online bookstore. It’s worth noting that at the time, Amazon was still called Cadabra, but later this name was abandoned because it was too similar to “cadaver” (English: “dead body”).

It’s a garage business

It is often written that Jeffrey Bezos (the founder of Amazon) started his project in a garage. But either he is confused with Steve Jobs or it is customary to write about successful startups, but there is no evidence for this.

The initial investment in the project amounted to at least $300 thousand. We assume that with this amount in 1994, Bezos could have rented a decent office. Other sources claim that the startup capital exceeded $1 million and consisted of his father’s personal savings, loans from friends and relatives, and investors’ money.

Actually, Jeffrey himself was not a poor enthusiast with no money at the time of launch. The Princeton University graduate, who later worked on Wall Street, could accumulate the necessary capital. Moreover, Bezos had a prestigious position as vice president of the company before he was fired.

The world’s most abundant river

After a few months of existence, Cadabra was renamed to match the American river. This is how the founder of Amazon expressed his ambitions to build a truly large-scale corporation.

Another important factor was the fact that the first letter of the English alphabet was the first in the name. Browsers of the time often provided search results in alphabetical order.

And the presence of the last letter – “z” – defined the marketing company for many years to come. Amazon has become a place where you can find anything you want.

1,000,000 in 2 years

By 1997, the number of Amazon users had already exceeded one million. In the same year, the company went public with an IPO and received a capitalization estimate of $66 million and began selling shares at $18 each, which sold like hotcakes.

Such rapid development and stunning success could not leave other market players indifferent. And in 1997, the first scandal occurred around Amazon: Barnes & Noble opposed Amazon’s claim to be the “world’s largest bookstore.” However, the case did not go to court, they settled the matter in a settlement agreement, and this incident did not have much impact on the future of the global marketplace. Unlike many other high-profile cases that accompanied the company’s further development.

Labor disputes and tax evasion

What else can Amazon boast of? The history of the creation of such a corporation could not pass without accusations of low pay and inadequate working conditions. Every now and then, workers organize public rallies, drawing public attention to the fact that they are not given breaks and insufficient safety conditions in warehouse centers.

In 2012, and again in 2014, Amazon was accused of using tax loopholes and receiving large subsidies from government agencies. This resulted in the company paying negligible taxes compared to its high revenues.

Environmental activists, in turn, constantly criticize the company for the use of non-recycled packaging materials, excessive energy consumption of their data centers, and the environmental impact of their logistics infrastructure.

Amazon’s success and its root causes

But despite the scandals, the company remains a leader in its industry. This is largely due to its strategy of intensive growth and innovation. Amazon was one of the first to

  • implemented personalized recommendation systems (based on past purchases and user experience);
  • started research into the use of unmanned drones for delivery of goods;
  • developed automated warehouse management systems;
  • offered users a paid subscription (Prime), which includes fast and free delivery, streaming service and other benefits;
  • developed the concept of stores without cash registers, where customers can take goods from the shelves and leave the store, and their purchases will be automatically paid for through a mobile application.


Hence, we conclude that it is active investment in technology development, including the development of its own electronic

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