It’s not every day that the value of a company surpasses the average annual expenditure of a large country, but on Tuesday Amazon did just that. The company charged past the trillion-dollar market value threshold and becoming the second American corporation to do so while on the heels of Apple’s success at the beginning of August. After years of relatively insignificant profit generation due to rapid expansion in the non-traditional realms of technology and distribution, the 24-year-old online shopping giant has ultimately begun to focus on creating returns for its investors. CEO Jeff Bezos continues to spend at a loss internationally, where Amazon has a smaller foothold in the e-commerce industry; this strategy continues to pay off, thanks to its diverse holdings. Many remain skeptical, however, as online commerce only accounts for less than ten percent of all retail sales, and physical stores like Walmart continue to dwarf Amazon in revenue. Still, Amazon quadruples these competitors in its total value and continues to grow at a rapid pace, e.g. its acquisition of its organic grocery store, Whole Foods, and its introduction of a meal delivery service similar to popular providers Blue Apron and HelloFresh. The company maintains dominance over five percent of all retail sales, according to Bloomberg Weekly, and hopes to continue its online shopping hegemony. This has not satisfied the retailer, however, as Amazon seeks to enter and revolutionize the physical market. Amazon Go, a store which opened in downtown Seattle last January, features technology which allows shoppers to bypass any checkout line with an app that automatically charges the user’s Amazon account for products removed from shelves. Its inhouse brand, AmazonBasics, creates products for highly competitive prices.
In 1994, Bezos left his comfortable position as a vice president at a large Wall Street firm to participate in the mid-decade Internet business boom. After choosing the exotic sounding name “Amazon” while flipping through the dictionary, Bezos set up shop in his personal garage in Bellevue, Wash.
Within a few short months, the upstart book retailer produced a staggering revenue of over $20,000 a week. Debuting publicly at $18 per share in 1997, today AMZN hovers just below $2,000. A series of lawsuits from the likes of Barnes and Noble and Walmart at the end of the decade, challenged the young company. Furthermore, its slow crawl towards profitability worried investors, returning only one cent per share in 2001. The company’s survival during the dot-com burst in the new millennium, however, proved the viability of Bezos’ growth strategy.
Today, the now-trillion dollar corporation continues to surprise investors and consumers alike. By 2020, Amazon is expected to double in value as the online shopping industry becomes increasingly popular among Americans. Currently, the company violates no anti-trust regulations, but in the future, this could change, for Senators Bernie Sanders (VT) and Mark Warner (VA), as well as President Donald Trump have targeted Bezos and his company. In an uncertain future, Amazon will likely remain a significant and noteworthy force within the many markets it has impacted.
Benjamin Popp is a third-year student double majoring in history and Latin with minors in civic and professional leadership and anthropology. ✉ BP863365@wcupa.edu.