Amazon: The World’s First Quantum Business Model

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From Seeking Alpha:

According to Etrade, analysts “expect” Amazon’s stock to be earning $23.01 per share by 2019. At the current P/E of 185, that equates to a stock price of $4,255, and those are median estimates. How is Amazon thriving when low-cost retail operations appear to be struggling across the board? The company has employed a new quantum business model that works from the subatomic (or transaction level) up.

The new quantum business model is driven by more than cost savings from market efficiencies of scale. This new business model is driven by a company’s reaction time to changes in consumer demand and preference. While some retailers use Omnichannel to gain insights on customer trends, the data is lagging and changes are not real-time. At Amazon, each transaction tailors the experience for both the retailer and customer as it occurs. From an operational perspective, inventory inefficiencies are virtually eliminated and yet, from the consumer’s perspective, there is a never-ending supply of inventory. The result is increased sales and lower fixed cost.

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Trade is at the heart of the U.S. and world economy. The retailer buys inventory from the wholesaler and the consumer buys that inventory from the retailer. It’s a business relationship that’s been at the backbone of nation state building for centuries. Today, the new nation is a corporate state and Amazon is among the nobility.

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Amazon has sellers from more than 130 different countries that fulfill orders to customers in 185 countries. It has created the world’s first global mall, and it is a model of “doing business” that is as synergistically revolutionary to the nature of trade and commerce as the quantum computer.

“2016 was a record-breaking year in sales worldwide for sellers on Amazon. The Amazon Marketplace empowers brand owners and retailers of all sizes, many of them small businesses, to reach customers around the world,” said Peter Faricy, VP for Amazon Marketplace.

Instant consumer feedback, more sophisticated algorithms for search and product features, and a robust solution center provide automated error correction mechanisms for both the retailer and consumer. These mechanisms work to constantly evolve the user experience with each transaction. They enable Amazon’s business model to be more flexible, customizable, reactionary and scalable than peers.

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It’s also worth noting that this technology rich business model creates a need for jobs. Amazon has committed to creating 100,000 full-time jobs over the next 18 months. That’s a jump from 180,000 to 280,000 full-time US based jobs. These jobs come with incredible benefits like the Career Choice program that pre-pays 95% of tuition for high demand careers such as nursing, medical lab technologies and machine tool technologies.

Perhaps the engine or lifeblood at Amazon is the small business development program, aka ‘Fulfillment by Amazon’, which grew more than 50 percent over the holiday season alone.

Link to the rest at Seeking Alpha

5 thoughts on “Amazon: The World’s First Quantum Business Model”

    • I wouldn’t worry, those ‘experts’ have been so wrong about Amazon so many times it’s getting where it’s no longer funny but sad.

  1. Jeez! Talk about straining for an utterly irrelevant metaphor…

    Quantum business models? HAHAHAHA…

    Nah, I’ll pass on this quantum BS and go with Heisenberg’s Uncertainty Principal for “expert” prognostications.

    • It didn’t guarantee anything for ever, but those automakers that did not adopt the assembly line soon disappeared. That GM had bigger and better assembly lines than Ford, or that Toyota eventually beat them both by superior build quality, can be of little consolation to anybody whose great-grandfather invested in Locomobile.

      The businesses that eventually disrupt Amazon will be at minimum as agile, as adaptable, and as good at tracking the preferences of individual consumers, as Amazon is now.

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