Amazon (AMZN)

History of the Company

Amazon, founded in 1994 by Jeff Bezos, is the world’s largest online retailer. The company has its headquarters in Seattle, Washington. Bezos studied the top products that he could sell online. He chose books because of large demand and low price points, and the vast number of titles available. Within two months, Amazon’s sales had reached $20,000 a week. 

After its initial success, Amazon very quickly added more products, including DVDs, mp3 downloads, furniture, clothing, toys, food, and jewelry. Amazon also produces the Kindle line of eBook readers and tablets, and sells eBooks. 

Amazon is a global company, with separate websites for the U.S, U.K., France, Canada, Italy, Germany, Spain, Australia, Brazil, Japan, China, India, Mexico, and others, with shipping to even more countries. 

Trading Amazon: What You Need to Know

  • Amazon’s IPO was issued on May 15, 1997, at a price of $18 per share. It trades on the NASDAQ exchange, like most other internet companies.
  • Amazon’s initial business plan did not expect to see profits for four to five years. Stockholders initially complained about the slow growth, but after the dot-com bubble burst in 2000, Amazon survived and began to profit. 
  • Forty percent of Amazon’s sales are driven from its affiliate program, called Amazon Associates, and from third-party sellers. 
  • Amazon is the leader in providing cloud-computing services. Cloud solutions are becoming more and more important, so if Amazon can retain the edge on the market it will continue to be successful.  
  • Amazon’s membership service, Amazon Prime, offers 2-day free shipping, video streaming, and other services for a fixed price. Price increases for this service have the potential to drive the stock up or down, depending on the perception of consumer reaction to the news, and if people are willing to pay more for Prime. 

Amazon started out as an online bookstore, and in just a decade has become an internet superstore, technology platform, fulfillment and logistics platform, advertising platform, and more. Anyone who wants to trade Amazon stock should research the company and perform an analysis before trading.

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