http://bits.blogs.nytimes.com/2009/09/19/amazon-slaps-its-brand-on-some-consumer-electronics/index.html?ref=technology
Summary:
The widely popular online store (Amazon) is becoming the retailer of almost every other kind of product. Similarly to Safeway cereal, RadioShack batteries, and even Wal-Mart diapers, Amazon is launching out their own brand name of products such as Pinzon bath towels and sheets, Strathwood patio furniture, and Denali power tools. This way Amazon can gain a larger percent of retail profits and expand their name and popularity. Evidently, Amazon is starting their expansion in their own private-label line with Amazon Basics which is a collection of consumer electronics items. Amazon's vice president, Paul Ryder explains that Amazon hopes to source products directly and cut out the intermediary. In this way, Amazon is able to pass discounts directly to customers. Although, the items sold on Amazon Basics are not all that exciting, it is clear that the items will eventually gain excitement. However, it is doubtful that Amazon will be offering any HDTV's any time soon.
Connections:
This article explains Amazon's hope of becoming a retailer of more than just online items. In this way and with the business of Amazon Basics, Amazon will become apart of the normal channel of distribution. Consumers can find electronic items such as CDs and DVDs through this channel of distribution which are the majority of items sold on Amazon Basics. Also, it seems that Amazon hopes to be apart of the direct channel of distribution because Amazon hopes to pass discounts to customers directly. This channel of distribution returns to the original roots of Amazon; selling goods online to customers directly. Amazon is a prime example of an industrial user that buys products from secondary manufacturers to sell to consumers like ourselves. Finally, chapter 1 mainly highlights the field of retailing and by slapping their brand on various items, Amazon has entered an entire new area of retailing.
Reflection:
As a frequent consumer of Amazon, I am thrilled that Amazon is expanding their label. I found Amazon's business ethics described in the article to be very clever. For example, sourcing out products and cutting the intermediary to pass discounts directly is a convenient and easy way to gain good reputation and loyal customers. Although, the products available to consumers could be a bit more exciting, I am still very happy with a simple way to buy electronic goods. Fortunately, Amazon provides this and possibly, in time, more. With a smart and reliable business plan such as the one Amazon contains, I am certain that Amazon Basics will do wonders in the world of retailing.
Subscribe to:
Post Comments (Atom)
I find it interesting how more and more retailers are improving and coming up with so many ideas to attract consumers. The Amazon came up with good strategies for expanding their target consumers and offerings to them. There aren't many online food retailers available for consumers, the idea of requesting goods from wholesalers and other non-online retailers like Wal-Mart and Safeway is quite clever. More consumers would shop online because of the convenience of not having to leave home. There are many advantages for the Amazon because it's an online retailer and not only that but because it now offers every other product sold in stores.
ReplyDeleteAmazon's idea of expanding their business is great because this way they'll be earning more money than they already do. Its great how they thought of expanding a new private label to sell electronics since now a days, many people are much more interested in electronics. Most people usually buy products online because it's much more convenient. Like the article said, items that are currently sold on Amazon is not so exciting at the moment. I believe they would attract many more customers once they expand their business to selling electronics. I've actually never been interested in Amazon until now, knowing what's actually going on. I also think it's a great idea how they came up with the idea to expand their business.
ReplyDelete