m Founded by Jeff

Bezos in 1995

mOnline bookshop

mFirst mover advantage

mDiverse
 Inventory Management Practices
ustomers can choose how their products are delivered

Practices ´bulk packagingµ

Keeps inventory at a minimum

Some distribution centers carry only a few product

categories
 reasons For Holding Inventory

TIME

‡To eliminate the Time-Lag b/w supplier & user

UNErTAINITY

‡To maintain buffers to meet uncertainties in

Demand, Supply & Movt of goods

EONOMIES OF SALE

‡Bulk buying, movt. & storing leads to lower costs

?
  ?

Book·s location identification through the Bar

ode in the ustomer·s Invoice.

Signal sent to worker·s wireless receiver.

Worker Identifies the items to be picked up &

verified weight of each product.

Product sent through conveyor belt to the

central point for barcode verification.

Product packed & parceled.


?
?


Supply chain management technique.

retailer transfers order to either the manufacturer or

the wholesaler.

Stock of only popular & frequently purchased items.

Amazon as a Transshipment centre.

ontract with Ingram Micro Inc. for desktops, laptops,

etc.

Ineffective if the order contained products of different

categories.

Included products of competing retailers.

Offered discounts on shipping charges.

 Holding Ordering Stock out
costs £ costs - costs -

associated associated lost sales

with holding with costs of due to lack
or ´carryingµ placing order of supplies
inventory and for
over time receiving customers
goods



 

Obsolescence Insurance Extra staffing

Interest Pilferage Damage

Warehousing
 OrDErING OSTS

Order
Supplies Forms
processing

lerical
Etc.
support
    

Shortfall costs
Outsourcing
 Outsourcing

Warehouses were maintained- osting

$50 million dollars each

Managing Warehouse was cutting profit

margins. 3 Yrs in the red

Adopted Drop Shipment model

risk of Losing reputation but on the

other hand outsourcing abetted
expansion.
ë 
 

ë 


ë   ë 

Decision £ what to buy and from where

Decided to buy its books, videos etc directly from publishers.

Good relations with vendors to extract best deals from them

refined software £ helped in accommodating the inventory

as per the demand in different regions

ost effective - Partnered with other companies for shipping

the inventory

revamp the layout of its warehouses £ easier to locate and

sort customer orders.
urrent Scenario-2010

rEVENUE- US $ 24.509 Billion

NET INOME- $902 Million

EMPLOYEE- 31200

Acquired Zappos.com- A customer based

e-commerce company in lieu of
increasing market penetration