Tuesday, September 4th Amazon market valuation crossed the one trillion dollar mark, making it the second company to achieve that milestone. This development comes hot on the heels of Apple also recently hitting the mark.
It is interesting to note that just two decades ago, Amazon was nothing more than just a simple bookseller selling books online. Things started looking up for Jeff Bezos and team when they decided they can sell more than just book online and ventured into a full-blown online supermarket with all-you-can-buy under one click.
On that fateful Tuesday, Amazon shares experienced some early gains in the day, which rocketed the company’s valuation above the $1 trillion mark. Though it closed the day at $2,039.51 with a market valuation of $995 billion.
Apple becomes the second US firm to join this very exclusive trillion dollar club of companies. Bezos’ journey to making Amazon into the e-commerce giant it is today began by selling books in a garage and a small loan from his parents.
Bezos first incorporated the company in 1994 under the name ‘Cadabra’ but later renamed it to ‘Amazon.’
“Despite its size and scale, there is still something young about Amazon,” said Neil Saunders, a Managing Director at GlobalData Retail. Saunders described the company’s achievement as simply “extraordinary.”
“Amazon is really only just getting started.”
The company’s business model has always been growth over profit. Something that has seen Amazon invest heavily in warehouses, distribution networks, and data centers.
“Every cent they made, they put back in the company,” said Rob Enderle, an independent tech analyst.
“They kept their eye on the prize, which was initially to take over most of the commerce.”
What has kept the company ahead of the competition is persistent innovation.
“This heady pace of creativity is the key reason why it stays several steps ahead of the market and is able to generate so much growth,” added Saunders.
Jeff Bezos hands-on management style
As the company grew bigger year-after-year, economics and financial experts thought Bezos would leave the management of the company to Ivy-league educated managers. However, he has kept firm control of the company, even giving hedge fund investors a wide berth.
Over the years he has also avoided scandals and other distractions all the while keeping revenue high and costs down. He also persistently encroaches into “adjacent market” that would easily fall in line with Amazon’s core strengths and interests.
One of these “adjacent markets” being cloud computing, which Amazon has wholly borrowed from its own infrastructure it needs to run its own e-commerce business. The Amazon cloud computing services is one of the world’s leading cloud computing services in the world.