01-29-2007, 10:37 AM
Quote:Welcoming third-party merchants into the fold has helped Amazon keep its inventories low while offering more merchandise. And of course, while low-cost shipping may be why Wall Street has often been less than bullish on Amazon (low margins have often been an area of concern), the company has been able to make up for its low prices and subsidized shipping with high sales volumes. Amazon's compound annual growth rate in sales is 26.6% over the last five years, in fact -- a pretty impressive showing, especially since the company is large and mature at this point.
That high sales volume -- and large base of satisfied customers -- helps put Amazon among the creme de la creme of Internet retailers. Customer reviews have been a large part of Amazon's retailing strength; despite the fact that you can touch and feel items in bricks-and-mortar stores, what kind of luck do you think you'd have asking nearby shoppers in a physical store if they have any experience with the products? Along those same lines, Amazon.com also provides customer ratings and product wikis -- more ways it helps online shoppers get an idea of what to expect from the merchandise it sells. And of course, like many other online companies that have come to recognize the strengths of today's Internet, Amazon's recommendations are often right on the money, too...
full article: http://www.msnbc.msn.com/id/16789205/