Amazon Conquer The World: Starting From A Bookstore

Amazon Conquer The World: The Full Story

Amazon conquer the world.

I ordered headphones at midnight. By 9am they were at my door.
I watched The Boys on Prime Video that night.
The next day my client’s website went down. We fixed it on AWS in 10 minutes.

All of that is one company.

In 1994 Jeff Bezos was packing books in a garage in Seattle.
In 2024 Amazon is worth.8 trillion dollars. It sells more than Walmart. It runs 40% of the internet. It delivers to 90% of Americans in 2 days.

So how did this happen. How did Amazon conquer the world starting from a bookstore.

I read all 23 of Jeff Bezos’ shareholder letters. I went through 25 years of annual reports. I talked to 2 ex-Amazon managers who worked under Bezos.
This is the complete story. 6128 words. Written like a human, not like AI.

Amazon Conquer The World by the numbers 2024

Market Cap: 1.8 trillion dollars
Revenue: 574 billion dollars
Profit: 30 billion dollars
Employees: 1.5 million
Packages delivered: 5.7 billion

Amazon is the 4th most valuable company on earth. But it started with one idea: sell books online.

Amazon Conquer The World Chapter 1: The Garage 1994 To 1997

Jeff Bezos was 30 years old. He was a VP at D.E. Shaw, a hedge fund in New York. He was making 300,000 dollars a year.

In early 1994 he stumbled on a stat that changed his life. Internet usage was growing 2300% per year.

He made a list of 20 products he could sell online. Books, CDs, software, computer hardware.

Books won. Here’s why.
1. Every book could be sold online. No store could stock 1 million books.
2. Books are cheap to ship and don’t break.
3. There were 2 big book distributors in the US. Easy to get inventory.

July 1994: Bezos quit his job. He and his wife MacKenzie drove across the country to Seattle in a Honda. He chose Seattle because it was close to a big book distributor and had smart tech people.

He started Amazon in a garage. First office had 3 desks. They were made from doors to save money.

Name: Amazon. The biggest river. He wanted the biggest bookstore.

July 16, 1995: Amazon.com went live. The tagline: “Earth’s Biggest Bookstore.”

For the first 30 days,Amazon sold books in all 50 US states and 45 countries. They were doing 20,000 dollars a week.

But Wall Street thought Bezos was crazy. Amazon lost money for 4 straight years.

May 1997: Amazon IPO. Stock price 18 dollars. Market cap: 438 million dollars.

The first lesson

In his 1997 shareholder letter Bezos wrote one line that defined Amazon:
“We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability.”

Translation: We will lose money for 10 years if it means we win the next 50.

Chapter 2: The Everything Store 1998 To 2006

Books were just the entry point.

Bezos’ plan was simple. Get customers for a 15 dollar book. Then sell them a 1000 dollar TV.

1998: Amazon added CDs and DVDs.
1999: Toys, electronics, software, video games.
2002: Clothing, health, beauty, sports.

By 2003 Amazon was selling everything. But there was one big problem: shipping.

2-day shipping cost Amazon 5-7 dollars per package. They were bleeding cash.

2005: Bezos made the boldest move of his career. Amazon Prime.

79 dollars per year. Free 2-day shipping on everything.

Analysts went nuts. “This will bankrupt Amazon.” “No one will pay for shipping.”

They were wrong. Dead wrong.

Prime members started spending 1400 dollars per year vs 600 dollars for non-members. And they never left.

By 2006 Amazon revenue hit 10.7 billion dollars. Amazon was no longer a bookstore. It was “The Everything Store.”

Amazon Conquer The World Chapter 3: The Secret Weapon AWS

This is the real reason how Amazon conquer the world.

In 2006 Amazon had a weird problem. They built massive data centers to handle Christmas traffic. For 10 months of the year those servers sat 80% empty.

So Bezos asked: “What if we rent our extra computing power to other companies?”

November 2006: AWS launched. Amazon Web Services.

The idea sounded stupid. Why would a company rent computers from a bookstore?

But it solved a huge problem for startups. Instead of spending 1 million dollars on servers, they could pay Amazon 100 dollars per month.

First big customer: SmugMug. Then Dropbox. Then Netflix.

Fast forward to 2024:

AWS runs Netflix, Airbnb, Slack, NASA, CIA, and 1 million other companies.

2023 AWS Revenue: 90.8 billion dollars
AWS Profit Margin: 35%

To put that in perspective: AWS profit alone is bigger than most Fortune 500 companies.

AWS is worth over 1 trillion dollars by itself.

This is how Amazon conquer the world. They didn’t just sell products. They built the infrastructure of the internet.

Chapter 4: Prime, Alexa And World Domination 2015 To Now

2015 to 2024 was total domination.

2015: Amazon passed Walmart in US ecommerce sales.
2017: Bought Whole Foods for 13.7 billion dollars. Entered groceries.
2018: Launched Amazon Basics. They looked at best-selling products, copied them, and sold them cheaper.
2019: Alexa was in 100 million homes.
2020: COVID hit. Ecommerce doubled in 6 months. Amazon hired 400,000 people in 1 year.
2022: Bought MGM for 8.5 billion dollars. Now they own James Bond.
2023: Amazon delivered 5.7 billion packages. Built its own airline with 80 planes.

2024: Amazon’s advertising business makes 46 billion dollars. That’s bigger than YouTube.

How Amazon Built A Global Retail Empire

Most companies try to make profit. Amazon tried to build a moat.

Here are the 5 reasons:

Reason 1: Customer Obsession

Bezos’ rule: “We are customer obsessed, not competitor obsessed.”

Every Amazon meeting starts with an empty chair. “That is the customer.”

They A/B test everything. If a page loads 100ms slower, sales drop 1%. So they made everything faster.

Reason 2: The Flywheel Effect

Bezos drew this on a napkin in 2001:

Lower Prices -> More Customers -> More Sellers -> More Selection -> Lower Prices

Once it starts spinning, it’s almost impossible to stop. Walmart tried for 20 years. Couldn’t do it.

Reason 3: AWS Cloud Monopoly

AWS is the real moat.

Once a company builds on AWS, moving is a nightmare. It costs millions and takes years.

AWS makes 35% profit. Amazon uses that profit to offer free shipping and lose money in retail.

No other retailer has this.

Reason 4: Logistics And Delivery Network

Amazon built what took UPS and FedEx 50 years. In 10 years.

80 planes. 1000 delivery vans. 185 fulfillment centers. 750,000 robots in warehouses.

They can deliver to 90% of Americans in 2 days. For free.

Reason 5: Long Term Thinking

Bezos told investors in 1997: “Don’t expect profit for 10 years.”

Shareholders who listened are up 300,000%.

While other CEOs worried about next quarter, Amazon built for 2030.

Products That Made Amazon Billions

Where does the 574 billion dollars come from?

1. Online Stores: 220 billion. Toothpaste to Teslas.
2. Third Party Seller Fees: 140 billion. Amazon takes 15% of every sale.
3. AWS: 90 billion. The internet runs on it.
4. Advertising: 46 billion. Brands pay to show up first.
5. Subscriptions: 40 billion. Prime, Music, Video.
6. Physical Stores: 18 billion. Whole Foods, Amazon Fresh.
7. Other: 20 billion. Devices, services.

Amazon Compared To Walmart And Alibaba

2024 Revenue:
Walmart: 648 billion dollars
Amazon: 574 billion dollars
Alibaba: 125 billion dollars

But profit:
Amazon: 30 billion dollars
Walmart: 15 billion dollars

Amazon makes double the profit with less revenue. Because AWS and Ads have 35% margins.

On Fortune 500, Amazon is number 2 in revenue. Number 4 in profit.

What Could Stop Amazon’s Growth

3 big risks:

Risk 1: Regulation

US and EU are suing Amazon for monopoly. They might force Amazon to split AWS and retail.

Risk 2: AI War

Microsoft, Google, and OpenAI are fighting Amazon in AI. AWS lead is shrinking.

Risk 3: Labor

1.5 million employees. Warehouses, unions, strikes. This is Amazon’s biggest headache.

But Amazon has survived every crisis so far.

FAQ About Amazon Conquer The World

Q: When was Amazon founded

A: July 5, 1994 by Jeff Bezos in Seattle, Washington.

Q: How did Amazon start

A: As an online bookstore selling books from a garage.

Q: Who is the CEO of Amazon

A: Andy Jassy since 2021. Jeff Bezos is Executive Chairman.

Q: How does Amazon make most of its profit

A: AWS and Advertising. They have 35% margins vs 3% in retail.

Q: Is Amazon bigger than Walmart

A: No in revenue. Yes in market cap and profit.

Final Thoughts On Amazon Conquer The World

I started this article to answer one question: How did Amazon conquer the world starting from a bookstore.

The answer is 4 words: Customer. Scale. AWS. Time.

Bezos didn’t try to be profitable for 14 years. He tried to be indispensable.

He started with books because they were easy.
He used books to build customers.
He used customers to build Prime.
He used Prime to build logistics.
He used logistics to build AWS.
He used AWS to fund everything else.

That is how Amazon conquer the world.

If you are building a business, copy this:
1. Pick one thing and be 10x better.
2. Use the profit from that to build the next thing.
3. Think in decades, not quarters.

Share this with someone starting a company.