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Overview of Amazon’s Market, Customers, Resources, and Financial Trends Essay

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Introduction

Amazon was founded 1994 as an online textbook retailing firm targeting tertiary learners. Today, it is a highly diversified company with 80 private label brands such as Amazon Go, Echo, and Audible. For this paper, Amazon is one of the world’s top three most valuable companies, alongside Microsoft and Apple (West, 2020). This section will provide an overview of Amazon Inc regarding the market, customers, resources, and trends. Lastly, the paper will summarize financial information in numerical detail in an accompanying Excel sheet.

Market

Amazon’s retail wing has a significant market share compared to its competitors. One of the reasons for its dominance is that Amazon can leverage its vast economies of scale to offer comparatively lower prices to its customers. For instance, Amazon’s retail wing prices its groceries cheaply compared to dedicated grocery stores, making it the store of choice for many American kitchens (Semuels, 2020). Moreover, Amazon routinely buys out its competitors to increase its stranglehold on the market.

For instance, Amazon bought the online bookstore Audible and thus cemented itself as the leading online bookseller globally (Davis, 2020). In addition to retail, Amazon has a significant stake in the technology industry. In particular, Amazon has one of the largest repositories of data in the world. Its big data analytics algorithms churn out inferential information that Amazon sells to other companies. Amazon is virtually peerless in this particular market as it was one of the first companies to start storing data en masse for commercialization.

Customers

Amazon’s retail customers are primarily households buying various products, including electronic appliances, foodstuffs, books, music records, movies, and clothing. Amazon’s competitors for customers in the retail space include supermarkets such as Walmart. However, supermarkets do not typically provide delivery services, making Amazon particularly appealing for customers who do not intend to leave their houses. Notably, Amazon can deliver its products in a timely and accessible manner, which fosters customer loyalty (Jindal et al., 2020).

Before the COVID-19 pandemic, nearly 90% of American consumers preferred to shop in a physical store (Jindal et al., 2020, p.271). This number has drastically reduced following the pandemic, with many people preferring to shop from the comfort of their homes (Pisal, 2021). Amazon’s main competitors within the e-commerce space are eBay and AliExpress. In 2020, Amazon made sales worth $125.56 billion compared to 71.985 billion for AliExpress and 10.27 billion for eBay (Mahmud, 2020, p.5802). Amazon is significantly ahead of its competition in terms of customer pull and annual sales.

Resources

Amazon’s most important resource is its massive data repositories and big data analytics capacity. Williams (2020, p.36) quotes Amazon’s CEO: “In general, we collect as much information as possible.” The primary source of this data is primarily shared by individuals across Amazon’s platforms, such as Echo and Alexa (Williams, 2020). For Amazon, consumer data is essential for creating individual-centric advertising based on predictive analytics. Additionally, by selling it to other corporations, Amazon treats the data it collects as a marketable asset (Williams, 2020). Another crucial, albeit less nuanced, input for Amazon is the items it retails on its platforms. These are typically sourced from manufacturers and other vendors who partner with Amazon.

Amazon can employ the Internet of Things (IoT) to augment the capacity of its management and human resource frameworks. Amazon’s warehouse, distribution, and accounting elements benefit significantly from extensive data and IoT resources (West, 2019). By leaning heavily on technology, Amazon cuts down on its human resources component relative to its competitors and is, therefore, able to increase its margins and efficiency.

Trends

One of the significant trends that could potentially upset Amazon’s position at the top of the e-commerce sector is increasing concerns over data privacy breaches. Williams (2020, p.36) notes that Amazon is at the fore of “surveillance capitalism,” which compromises people’s rights to keep their data private and secure from manipulation by corporations. West (2019) echoes this fact and notes that with the increased use of the IoT in e-commerce on Amazon, humans are progressively ceding their rights to tech giants and artificial intelligence (AI) constructs. While such concerns are offset by narrations about the benefits of using big data to improve shopping experiences, calls for the observation of data privacy may, in the long term, force Amazon to adopt another approach.

Summary of Financial History

One of the critical observations from Amazon’s three-year financial statements pertains to its dividend policy. In particular, the company has not issued dividends for this period for indeterminable reasons (Investing.com, 2023). As such, one cannot derive ratios on dividends, specifically dividends per share (DPS), an essential ratio for investors.

One of the essential ratios observed in Amazon’s financial statements is the earnings per share (EPS) and how it fluctuates with the standard stock price. In particular, the EPS predicts the share price as follows:

202220212020
Earnings per Share or EPS$ (0.2672)$ 3.2392$ 2.0913
Common Stock Share Price at each Year-$ 84.00$ 166.32$ 162.46

Moreover, as noted earlier, profits in the immediate aftermath of COVID-19 in 2021 were the highest for three years. Notably, Amazon recorded a loss in 2022 following a contraction in the e-commerce market as customers re-regularized shopping in physical stores. Despite the dip in net income, Amazon’s capital structure ratios have mainly remained stable, with the debt-to-equity ratio for 2022 being 2.2 compared to 2.0 and 2.4 for 2021 and 2020, respectively. It remains to be seen how Amazon will fare going forward as the effects of the pandemic abate.

References

Investing.com. (2023). . Web.

Jindal, R. P., Gauri, D. K., Li, W., & Ma, Y. (2021). Journal of Business Research, 122(1), 270–280. Web.

Mahmud, M. (2020). . Turkish Journal of Computer and Mathematics Education, 12(3), 5801–5808. Web.

Semuels, A. (2019). Online grocery shopping has been slow to catch on. The Atlantic; The Atlantic. Web.

West, E. (2019). . Surveillance & Society, 17(1/2), 27–33. Web.

Williams, D. (2020). Power accrues to the powerful: Amazon’s market share, customer surveillance, and internet dominance. In E. Reese & J. Alimahomed-Wilson (Eds.), The cost of free shipping: Amazon in the global economy(pp. 35–49). Pluto Press.

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IvyPanda. (2025, January 20). Overview of Amazon’s Market, Customers, Resources, and Financial Trends. https://ivypanda.com/essays/overview-of-amazons-market-customers-resources-and-financial-trends/

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"Overview of Amazon’s Market, Customers, Resources, and Financial Trends." IvyPanda, 20 Jan. 2025, ivypanda.com/essays/overview-of-amazons-market-customers-resources-and-financial-trends/.

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IvyPanda. (2025) 'Overview of Amazon’s Market, Customers, Resources, and Financial Trends'. 20 January. (Accessed: 21 February 2025).

References

IvyPanda. 2025. "Overview of Amazon’s Market, Customers, Resources, and Financial Trends." January 20, 2025. https://ivypanda.com/essays/overview-of-amazons-market-customers-resources-and-financial-trends/.

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IvyPanda. "Overview of Amazon’s Market, Customers, Resources, and Financial Trends." January 20, 2025. https://ivypanda.com/essays/overview-of-amazons-market-customers-resources-and-financial-trends/.

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