Amazon and Barnes and Nobles Synopsis

Amazon.com Synopsis

What started as Earth's biggest bookstore has rapidly become Earth's biggest anything store. Expansion has propelled Amazon.com in innumerable directions. The firm's main Web site offers millions of books, CDs, DVDs, and videos (which still account for the majority, 65%, of the firm's sales), not to mention auto parts, toys, tools, electronics, home furnishings, apparel, health and beauty goods, prescription drugs, groceries, and services including film processing. Long a model for Internet companies that put market share ahead of profits, Founded by Jeff Bezos in 1995, it had 11 employees by year's end. Within four years, it had more than 1,600 employees and four million customers (Martin, 1996).

Largely known for its e-commerce success, like Harrison-Keys plans to accomplish, Amazon.com, an original web-based company, has ventured into many areas to increase profitability and enhance its products and services with trendy goods. Amazon started out as an online bookstore, constantly making news with the number of titles it offered for sale. In the late 1990s, Amazon had more than four million titles after adding CDs, videos, DVDs and games. It continued to add new lines of business including toys, consumer electronics, software, power tools, home improvement products and online auctions (Haines, 1998).

While Amazon is considered a pioneer in online retailing, they’ve had their share of growing pains. To help broaden the company's distribution capabilities, and to ease the strain on the existing distribution center that came from such a high volume of orders, in September 1997 Bezos announced that Amazon.com would be opening an East Coast distribution center in New Castle, Delaware. There was also a 70 percent expansion of the company's Seattle center. The improvements increased the company's stocking and shipping capabilities and reduced the time it took to fill customers' orders. The Delaware site not only got Amazon.com closer to East Coast customers, but also to East Coast publishers, which decreased Amazon.com's receiving time. With the new centers in place, Bezos set a goal for the company of 95 percent same-day shipping of in-stock orders, getting orders to the customers much faster than before.

There strategy worked well, allowing them to reach record sales and a highly unlikely milestone due to growing too fast. While securing quarterly net profits was a major turning point for the young company, a July 2002 Business Week article warned, "after seven years and more than $1 billion in losses, Amazon is still a work in process." Indeed, the company's foray into providing the "Earth's Biggest Selection" had yet to prove it could provide profits on a long-term basis. Nevertheless, Bezos and his Amazon team remained confident that the firm was on the right track. With $3.9 billion in annual sales, Amazon.com had without a doubt come a long way from its start as an online book seller (Business Week, 2002)

References (Amazon)

Chain Store Age Executive. 1996)"Jeffrey Bezos,"

Business Week. (2002). "How Amazon Cleared the Profitability Hurdle,"

Haines, Thomas. (1998). "Amazon.com Sales Grow While Loss Widens," Seattle Times.

Martin, Michael. (1996). "The Next Big Thing: A Bookstore," Fortune.

Barnes and Noble Bookstore

Barnes & Noble does business -- big business -- by the book. As the #1 bookseller in the US, it operates some 700 Barnes & Noble superstores throughout all 50 US states and the District of Columbia. It also owns almost 100 mostly mall-based B. Dalton bookstores. In cyberspace, the firm conducts sales through barnesandnoble.com (accounting for about 10% of total sales). Barnes & Noble's remaining businesses include general trade book publisher Sterling Publishing Co., and a 74% interest in seasonal kiosk retailer Calendar Club. The company exited the video game retailing business in 2004 when it spun off its GameStop subsidiary -- the #1 US video game retailer (Hoovers Online).

Unlike other bookstores, Barnes & Noble publishes many of the books it sells, inexpensively reprinting non-copyrighted titles or acquiring the U.S. or English language rights from another publisher. In addition, Barnes & Noble commissions reprint anthologies and omnibus editions using in-house editors. In addition to reissuing affordable editions of out-of-print titles under the Barnes & Noble Classics imprint, the company owns