If you’ve never shopped online at Amazon.com, you must be living under a rock! I’ve got some friends who Amazon.com knows on a first-name basis! Just in case you have indeed been living under a rock, here’s a little history on Amazon.com. In 1994 Jeff Bezos, a former Wall Street hedge fund executive, incorporated Amazon.com, choosing the name primarily because it began with the first letter of the alphabet and because of its association with the vast South American river. On the basis of research he had conducted, Bezos concluded that books would be the most logical product initially to sell online. Fast-forward 27 years and Amazon is winning the e-commerce sector by miles. So much for selling books!
Barring supply chain challenges due to Covid-19, Amazon has managed to up its game due to the surge in online shopping and streaming during the pandemic, so much so that it is expanding its aerial network and purchasing 11 planes to maintain its delivery system! Yup…eleven planes! Clearly, its rise during this unprecedented global crisis has got to be one of the biggest economic success stories of 2020!
WHAT MAKES AMAZON SO SPECIAL?
To give you a snippet of the kind of economic success I mean, check out the stats below:
- Amazon now employs over 1.2 million people globally – an increase by 50% since 2019. How many companies do you know of which actually recruited in such quantities during the pandemic?! Many had to shut their doors, laid off or furloughed.
- It added over 427K staff in the first 10 months of 2020 – from the beginning of the pandemic and during the most critical periods of globally increasing Covid-19 cases.
- Amazon is also spending US$2 billion to build 20,000 affordable homes for low-income families. They certainly know how to walk the talk. Great public interest piece that can only enhance its reputation and brand recognition.
- hey have also entered the healthcare industry and sports broadcasting. It is bidding for rights to the England-Australia Test cricket series. Success in ‘The Ashes’ will make it one of the biggest competitors of Sky Sports, Europe’s leading sports broadcaster. Talk about diversification! Amazon has got it down to a science!
- When the pandemic began, Amazon increased hourly pay by $2 an hour and doubled overtime pay. These pay increases were extended twice by May 2020. Did I mention that Amazon’s starting salaries are higher than its retail rivals? So in essence, while thousands of employers were downsizing, Amazon was adding to its employees’ pay packets, while also spending US$800 million on Covid healthcare precautionary measures in the first half of 2020 alone.
- Amazon has also expanded into new sectors. In December 2020, it became the largest purchaser of renewables with 26 solar and wind energy projects. Sustainability is the new buzz word and Amazon is certainly keeping one step ahead in its positive environmental reinforcement. Another plus for the brand.
- A daily average of 2,800 jobs added since July 2020, which could mean at this rate that it could pass Walmart as the world’s biggest private employer by 2023.
DARK DAYS AHEAD? Maybe not…
However, it has not all been sunshine and roses for the e-commerce giant. There have been reports of tens of thousands of Covid-positive tests and several deaths. Reports say that Unions representing the workers plan walkouts to protest against inadequate sick pay. Additionally, word on the ground is that several law suits might be in the offing as some staff are accusing the company of ‘purposeful miscommunication with workers, sloppy contact tracing, and [instilling a] culture of workplace fear’. Word on the ground also reveals that Amazon Canada’s vice president stepped down citing the firing of whistleblowers as the reason for his exit. While Amazon.com may have been a saviour of sorts for millions during the quarantine periods, and thousands of affiliates have enlisted in their affiliate programme in spite of their low 6-10% commission rate, Amazon may be in for some rocky months ahead, if the safety of its workers are at risk. Neither its reputation nor its rising revenues can help that.
I’m interested to hear if it’s the Amazon reputation and the exposure to millions of products that attracts affiliates in spite of the low commission rates. What’s your take?
A fascinating synopsis of what is happening with Amazon and how it all started, very up-to-date. I guess to answer your question about why affiliates still sign up to Amazon even with the 6-10% commissions is volume and ease of promotion. Because they show and stock so many versions of each product it makes it easy to promote individual products in any niche and be fairly sure that you will get a sale. This is terrific and if you are getting many sales then you can be assured of a fairly steady income over many catergories.
Hello Lily, thanks a mil for the response. Yes, I agree that is the draw for many affiliates. The vast volume of products available at Amazon from which you can choose for your niche. It adds up eventually even if the commission is lower than it’s competitors. I appreciate you taking the time to respond. Cheers!
Amazon has come a long way since its launch. It is interesting how big Amazon has become even down to their own delivery drivers. I remember ordering from them and getting packages delivered by FedEx, but they canceled their contract with FedEx and launched their own delivery service.
The Covid 19 cause issues with their employees who tested positive, as Amazon did not slow down and take precautions when the virus started. Amazon should have taken precautions and raised the minimum range or even offered some sort of bonus for their loyal employees.
Hello Jannette, thank you so much for your comment. I do agree that regardless of the size of an organisation or a brand, there is a responsibility to its employees without whom they would not be where they are. Amazon does invest in its human resource, but the pandemic is not a normal situation and it can’t be business as usual. We’ll see how things pan out this year…Much appreciated.
I have my own love-hate relationship with Amazon. I like the convenience of shopping there, and at one time I rand a retail business that was largely made possible by Amazon. Overall, I think they work hard to do what is right for employees, but the same does not extend to their retail partners. In our case they let us list our products for a 15-25% cut depending on our product line. If a product became very successful they would start to directly compete against us and undercut us. Considering that they don’t have to charge themselves that 15-25% it was impossible for us to compete. The other big issue is that if we wanted to charge a little less on our personal website where we are not paying the huge commission, they would seize our account until our prices were just as high or higher than what we listed them for. Ironically it is the same thing they sued Apple for with iBooks.
Hello Mike. Thanks for responding and for providing such an explicit and interesting response. Having first hand knowledge like you in the industry makes a world of difference. In my world, it’s purely what I read about on the internet and hear from other affiliates. Your story is not unique as so many others would have experienced the same. Sometimes when you have a bird’s eye view of a big name brand like Amazon, there is just so much you can see. But when you’re in the trenches, that’s when you see all the dirt and grit that turns the wheels. Thank you for commenting. Much appreciated.