INVENTORY MANAGEMENT AT AMAZON.COM

The caselet describes how the strategies adopted by Amazon.com (Amazon) to satisfy its customers ended up in inventory being piled up at the warehouse. The caselet discusses the steps that Amazon took to spruce up the inventory management system and the benefits that it derived from this. It also outlines the distribution process adopted by Amazon to dispose of its products quickly. Finally, it touches on the benefits that the company obtained by selling other retailers’ products through its website.
Issues:
» Customer satisfaction

» Need for efficient inventory management

» Distribution of products by online marketers
Introduction

Amazon.com (Amazon), started in 1995 by Jeff Bezos, was one of the first online shopping sites. Since its inception, it was consistently ranked as one of the best retail sites on the Internet and was regarded as the universal model for successful Internet retailing. By the end of 2002, Amazon had 22.3 million registered users on its site…

Questions for Discussion:
Amazon planned to do things differently for the 2000 holiday season. What were the reasons that led to the revamping of inventory management methods? How was inventory management made more efficient at Amazon?

Why was Amazon apprehensive about outsourcing inventory management? Do you think it was wise on its part to go ahead with its decision to outsource inventory management? Also, comment on the company’s idea of selling other retailers’ products on Amazon.com.