Value Chain Analysisof Amazon

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Value Chain Analysis of Amazon
Article · April 2022
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Value Chain Analysis of Amazon
The value chain analysis is a very important process that has the ability to create newer ways for
a business to develop its various sectors and improve the quality of its products which ultimately
increases the profit margin. These upgrades and improvements happen through various activities
and procedures that have a positive effective outcome to the business as a whole which include
developments on the firm infrastructure, technological advancements and human workforce
alongside the procurement that is governed by the supply chain department. Amazon, which is
one of the most prominent shopping websites, has been working in the fields of logistics
intensely in order to provide and deliver the best quality of products at the least amount of time
to its customers. In this essay, I will be shedding light on Amazon’s value chain and the way it
provides goods to its customers.
One of the most important challenges of the Amazon value chain is letting suppliers and original
equipment manufacturers add their own products and businesses in the Amazon website and
include their stocks in Amazon inventory in order to become a verified seller. Most of the times,
these sellers are middlemen who only add up unnecessary price and divert the buyer from buying
from the original manufacturer and supplier. They create a problem for both the supplier and for
Amazon as they are mostly professional people that can make their pages look absolutely real
which is how they deceive people. On the other side, products are going to be included in
Amazon Fulfilment and can be delivered through the Amazon logistics web of delivery. “Sellers
can also use FBA by stowing their inventory in Amazon fulfilment centres. In this case, Amazon
assumes full responsibility for logistics, customer service, and product returns. If a customer
orders an FBA item and an Amazon owned-inventory item, the company ships both items to the
customer in one box, as a significant gain of efficiency” (Dudovskiy, 2020). These can include
same day delivery which is a very intricate and complex process that allows the buyer to receive
its ordered goods to be received in the shortest amount of time possible. What makes these things
possible is the ever growing business of Amazon that has been one of most profitable companies.
Amazon also tries to increase its value chain through obtaining customer satisfaction as they
know if a customer feels happy about requesting a product upto the delivery and the overall
process which should be done in the most convenient way, the customer will most likely make
another purchase and also advertise for the company as well.
One opportunity for brands selling on Amazon is that Amazon not only provides logistics
services to its own firms but also to other companies as well upon request which is how they are
able to expand their network of communication and bond creation in order to have a more
substantial stance in the marketplace. By having the other small scale businesses depend on
itself, it will present its dominance in the marketplace. “Amazon uses logistics beyond the point
to serve Amazon Marketplace and starting from recently, the company has been offering logistics
services to others. For example, Beijing Century Joyo Courier Services, an Amazon subsidiary
registered with the U.S. government as an ocean shipping provider” (Schreiber 2016). Amazon
has always been an entrepreneur in the field of goods delivery and logistics due to their
ever-expanding network of sub-bases in the different parts of the world that further ease the
processes of delivery from door to door. This supply chain process is what keeps a value chain of
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a company to grow and expand through generating more bonds and more connections that
further increase the value of the company and of the products as well. For example, a product
that is produced by a renowned company that has immersed itself within its products quality and
dependability will have a much higher value than one produced by another company which is not
as famous as theirs even if their products were somewhat similar in their characteristics. The
former company has had its own name and fame which is why they are able to sell at a higher
price and people would still be into paying for it.
In conclusion, the value chain of Amazon is considered one of the most successful ones due its
intense network of divisions in the various parts of the world each of which contribute to the
increase in the company’s overall value chain.
Works Cited
Dudovskiy, J. (2020, April 03). Amazon Value Chain Analysis - Research-Methodology.
Retrieved May 23, 2020, from https://research-methodology.net/amazon-value-chain-analysis/
Schreiber, Z. (2016) “Is Logistics About To Get Amazon’ed?” Tech Crunch, Available at:
https://techcrunch.com/2016/01/29/is-logistics-about-to-get-amazoned/

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See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Value Chain Analysis of Amazon

Article · April 2022

The user has requested enhancement of the downloaded file.

developments on the firm infrastructure, technological advancements and human workforce

provides goods to its customers.

another purchase and also advertise for the company as well.

price and people would still be into paying for it.

increase in the company’s overall value chain.

Dudovskiy, J. (2020, April 03). Amazon Value Chain Analysis - Research-Methodology.

Retrieved May 23, 2020, from https://research-methodology.net/amazon-value-chain-analysis/

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