Wednesday, November 11, 2009

Amazon: Much More Than Books

Amazon has successfully expanded well beyond books and media, as this chart shows, building sales and profits hand over fist in the process. Despite the difficult economic climate that's battered many other retailers, Amazon's reputation for sharp pricing, expanding assortments, and good customer service has carried it through the tough times.

Meanwhile, Amazon's Kindle e-book reader is being challenged by Barnes & Noble's Nook e-book reader, sparking a price war to go with the book and DVD price war that recently erupted among major retailers. But B&N can't keep up with demand (remember the long waiting lists when Amazon launched the Kindle?) and now it's scrambling to increase inventory ASAP. If Amazon has plenty of Kindles in stock, that could tip the balance in its favor for the holidays.

What's next for Amazon? More private-label products are on the way as the company leverages its distribution and branding strengths. The company is also pushing its cloud computing services and other B2B offerings, which helps it weather bumps in consumer spending. And Amazon's unexpected but savvy acquisition of Zappos is a great way to profit from the lessons of using super customer focus to cement long-term loyalty.

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