Amazon Business Model - Know How Amazon Makes Profit

Feb 7, 2020
Development Partners

Welcome to Maslow Lumia Bartorillo Advertising, a leading marketing and advertising agency in the business and consumer services industry. In this article, we will delve into the fascinating world of the Amazon business model. Amazon, the e-commerce giant, has taken the world by storm with its innovative strategies and exceptional customer service.

The Rise of Amazon

Amazon was founded by Jeff Bezos in 1994 as an online marketplace for books. Over the years, it has grown exponentially and transformed into one of the most successful companies in the world. Today, Amazon offers a wide range of products and services, including electronics, clothing, household items, and cloud computing.

Key Strategies of Amazon

Amazon has embraced several key strategies that have contributed to its incredible success. Let's explore some of these strategies:

1. Customer-Centric Approach

Amazon's primary focus is on providing an exceptional customer experience. From fast shipping to hassle-free returns, Amazon goes above and beyond to ensure customer satisfaction. By prioritizing the needs and preferences of their customers, Amazon has built a loyal customer base.

2. Diversification of Product Offerings

One of the reasons behind Amazon's domination is its vast product offerings. The company has expanded its inventory to include almost everything under the sun. From popular branded products to unique artisanal items, Amazon ensures that customers can find whatever they need on their platform.

3. The Power of Prime

Amazon Prime, the company's subscription service, has become a game-changer in the e-commerce industry. With benefits like free two-day shipping, access to exclusive deals, and streaming services, Amazon has created a loyal base of Prime members. This subscription model has helped drive customer loyalty and recurring revenue for the company.

4. Embracing Technology and Innovation

Amazon is at the forefront of technological advancements and innovation. The company utilizes advanced algorithms, machine learning, and artificial intelligence to enhance customer experiences and optimize its supply chain. Additionally, Amazon has invested heavily in emerging technologies like drone delivery and voice-activated virtual assistants.

5. Amazon Web Services (AWS)

AWS, the cloud computing arm of Amazon, has played a significant role in the company's profitability. By offering scalable and reliable cloud services to businesses and organizations, AWS has become a leader in the cloud computing industry. This diversification of revenue streams has further solidified Amazon's position as an industry giant.

The Amazon Flywheel Effect

Another key aspect of the Amazon business model is the concept of the Flywheel Effect. This concept represents the continuous cycle of growth and innovation that drives Amazon's success. The Flywheel Effect is based on the idea that as more customers buy from Amazon, the company can invest more in improving the customer experience, which, in turn, attracts more customers.

By constantly iterating on its business model and exceeding customer expectations, Amazon has created a self-reinforcing cycle of growth. This cycle fuels innovation, drives down costs, and enables Amazon to further expand into new markets.


In conclusion, understanding the Amazon business model provides valuable insights into the strategies that have propelled the company to become a global powerhouse. By adopting a customer-centric approach, diversifying its product offerings, leveraging the power of Prime, embracing technology and innovation, and capitalizing on AWS, Amazon has revolutionized the e-commerce industry.

At Maslow Lumia Bartorillo Advertising, we help businesses like yours navigate the complex world of marketing and advertising. Contact us today to leverage our expertise and drive success in your industry.

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