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There are more companies like Amazon, but they don't exist online. Amazon is Walmart, Costco, CVS, and Target. (You could also compare them to Home Depot, Mei
by jtbigwoo 13y ago
There are more companies like Amazon, but they don't exist online. Amazon is Walmart, Costco, CVS, and Target. (You could also compare them to Home Depot, Meijer, Kroger, etc.)
There are two traditional paths to success in business--high volume/low margin or low volume/high margin (Timex vs. Rolex). Walmart is the classic high volume/low margin company. They started as a five-and-dime. Over the years they used their growing market power to add more product lines until they became a one-stop shop for everything. Amazon has followed Walmart's playbook almost from the beginning. While other early competitors were passionate about books, Amazon was passionate about warehouses and operations. The same thing happened when Amazon moved into music, electronics, and everything else. They could operate faster and cheaper than the other guys.
There are two reasons why there isn't another Amazon in the online world. First, geography meant that Walmart, Target, and Costco didn't directly compete in every place from the very start. They had time to develop and fortify an operational base and then expand. Companies like buy.com had to immediately challenge amazon in order to survive. Second, technology companies don't generally focus on the low margin/high volume path. Online companies are generally populated by folks from the tech industry who look to Microsoft and Apple as their models for operating a company.