Is Amazon becoming a High-Technology Company?Amazon is a high-technology company, however it is not a producer of high technology goods- it is a retailer. To that extent, its crowd sourced platform allows for partners and Amazon itself to benefit from high technology manufacturers, even those that produce products which compete with the high technology produced by Amazon, such as the Kindle tablet. It is a high technology company because its major product is the software and interface, which provides the retail giant with its platform, much like Uber, the ride sharing service, is a high technology company rather than a taxi company. While the company also sorts, packages and ships, much like a traditional online retailer, it is the storefront interface and the marketing of it which have created the brand by capturing the value of its thousands of partners.
Does it make sense for Amazon to sell Kindle below its cost?
It makes sense for Amazon to sell Kindle below its cost of production as the Kindle is a gateway to further proprietary sales. By practically giving away the Kindle there is far larger potential market for the Kindle media such as books and magazines which Amazon sells, and it helps to ensure that Amazon is a market leader given that this is a competitive area where early success can establish market position.
Should Amazon collect state sales tax in every state?
Amazon should collect state sales tax in every state as it is a requirement for doing commerce, and there is little reason why online sales should be different from other sales. The challenge is that these requirements, which are different jurisdiction by jurisdiction, results in an extra administrative burden which many online retailers claim is unfair. In other cases, they put the burden of determining what part of sales are in fact state sales tax on the partner which is using the online platform to make sales. Amazon, as one of the largest in online the retailing market is therefore also setting an ethical standard which improves the perception of the company as fair, and make it more difficult for competitors with smaller sales volumes to continue to evade taxes.
Should Amazon invest in same day delivery?
Amazon should invest in same day delivery services providing that is can come up with a business model which results in attractive pricing for the service. Should the costs of such a service be too high, then customers will be unlikely to use it, and the investment will have little return. Any investment in same day delivery should build on its network and the model of its current success by leveraging crowd sourcing, however research and the development of such networks is necessary to ensure that there are insights regarding limitations to the same day delivery promise. Failure to fulfill the same day delivery when offered and ordered would also reduce returns and potentially cause the investment to be wasted as customers report on such failures in social media.
Should Amazon expand its streaming content?
Amazon should expand its streaming content as this is major sales channel and media channel, as can be seen by the success of services such as Netflix and Hulu. This also provides additional content which increases the profile and interest in making purchases from Amazon. By expanding beyond hard goods to online goods which can be streamed, Amazon can also take advantage of goods which do not require shipping or warehousing.
Can Amazon compete with Samsung, Sony & Apple?
Amazon can compete with Samsung, Sony and Apple as a high technology company, but not necessarily as a producer of electronic goods. The Amazon advantage is that it is able to continue to make profits from those partners selling Samsung, Sony and Apple goods, both new and used, while also developing and selling products which compete with the products of these companies.
- NASDAQ. (2016). AMZ Company Financials. Retrieved from: http://www.nasdaq.com/symbol/amzn/financials?query=ratios
