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CHAPTER 7 Distribution Strategies 1995-1998 Establishing A 1995,7 Jeff Bezos founded Amazon 1995-1998 Establishing A 1996-1997 To support the increased traffic and sales ,the company built up its infrastructure and systems. Distribution center capacity grew from 50000 to 285000 square feet. Increased the number of titles held in its DCs to over 200000 at the end of 1997 and reduced promised delivery times on those titles. Major efforts were made in software development to support back-office operations. 1995-1998 Establishing A 1998, Amazon expanded its product lines. Nonetheless,with the additional product lines, the inventory turns dropped from 56 in 1997 to 24.8 in 1998. 1999 Building Additional Fulfillment Infrastructure By late 1998, the company was beginning to face toughter competition from player. So,Amazon started adding new product lines and features at a fast pace. 1999 Building Additional Fulfillment frastructure To support its transformation and its projected triple-digit growth,Amazon adapted its supply chain and distribution network. 1999 Building Additional Fulfillment frastructure Just before the Chrismas 1999 season , the new distribution center network was up and running.Amazon delivered more than 99% of its orders in time for Christmas 1999.In the fourth quarter alone of 1999,amazon shipped about 20 million items and acquired more than 2.5million first-time customers. 2000-2002 Optimizing the customer In early 2000,Wall Street began to put profit pressure on all dotcoms,including amazon s stock price which had reached a record high of $106.49 in Dec.1999. Fulfillment network 2000-2002 Optimizing the customer In this context,Jeff Bezos acknowledge the need for profitability and a stronger focus on operational excellence,which means treating customers right but at lower cost. Fulfillment network
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