Posted On June 6, 2017
Amazon is big—really big. The Seattle-based company is the fourth most valuable public company in the world, ranking behind only Apple, Alphabet (the parent company of Google), and Microsoft.
Amazon has dominated retail for a while, having surpassed Walmart’s market capitalization in 2015. In fact, Walmart isn’t even on the list of the top 10 public companies.
What is it, exactly, that Amazon does that’s so innovative? Is it because Amazon sells a wide variety of cheap stuff?
Walmart has been doing that for a long time.
Is it because Amazon has diversified its revenue stream, and has branched out from being a bookseller to a retailer, movie production company, and competitor of Netflix?
Amazon is a digital conglomerate, but conglomerates themselves aren’t new. RJR Nabisco once sold Camel cigarettes and Oreos (but for the record, kids did have to buy them separately).
It isn’t selling stuff cheaply or selling a lot of different types of things that give Amazon its competitive edge. Companies have been doing those things for a long time.Instead, Amazon has become so big because of its relentless focus on supply chain innovation. Amazon has fulfillment centers across the globe where sophisticated inventory management and delivery systems mean that in some instances products arrive on the same day they are ordered. The company’s interest in delivery via drone, called Amazon Prime Air, is well documented, and recently led to an application for a patent on a shipping label with a built-in parachute.
Amazon understands efficient supply chain management is the competitive edge when it comes to selling physical goods. Think about it: Most of the products we purchase today have advanced to the point where the differences in quality can be marginal. Put another way, if one TV has a higher resolution but the other has a wider screen, how do you tell which one is better?
The answer is often the one that arrives fastest and cheapest—and an efficient supply chain is how you make something cheaper that arrives faster. Amazon understands that gaining a competitive edge in a global economy depends on building a supply chain based around excellence. A more efficient, visible, and reliable supply chain that reduces the time between the moment your customer makes a purchase and the moment the purchase arrives at their loading dock will make your company more competitive.
Amazon founder Jeff Bezos knew that, and used that knowledge to grow an online book retailer into one of the world’s most dominant companies.If you want to dominate your industry, a supply chain that maximizes efficiency, streamlines your shipping processes, and increases visibility will play a big role in helping you get there.
Flat World Holdings and our family of companies (Flat World Supply Chain, Flat World Hospitality, Ram International, Ram Custom Crating, and Prologue Technology) will help you gain a competitive edge by helping you create a high-performing supply chain and logistics management program. Your business may not be like Amazon. But if you want to thrive in today’s global economy, your team needs to think like Amazon—beginning with your supply chain.