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Introduction to How Amazon Works

✴ In 1995, Amazon.com sold its first book, which shipped from
Jeff Bezos' garage in Seattle. In 2006, Amazon.com sells a lot
more than books and has sites serving seven countries, with 21
fulfillment centers around the globe totaling more than 9 million
square feet of warehouse space.
✴
✴ The story is an e-commerce dream, and Jeff Bezos was Time
magazine's Person of the Year in 1999. The innovation and
business savvy that sustains Amazon.com is legendary and, at
times, controversial: The company owns dozens of patents on
e-commerce processes that some argue should remain in the
public domain. In this article, we'll find out what Amazon does,
what makes it different from other e-commerce Web sites and
how its technology infrastructure supports its multi-pronged
approach to online sales.

Amazon Technology

✴ The massive technology core that keeps
Amazon running is entirely Linux-based.
As of 2005, Amazon has the world's three
largest Linux databases, with a total
capacity of 7.8 terabytes (TB), 18.5 TB
and 24.7 TB respectively [ref]. The central
Amazon data warehouse is made up of 28
Hewlett Packard servers, with four CPUs
per node, running Oracle 9i database
software.
✴

Amazon E-commerce

✴ Amazon.com has always sold goods out of its own
warehouses. It started as a bookseller, pure and simple,
and over the last decade has branched out into additional
product areas and the third-party sales that now represent
a good chunk of its revenue (some estimates put it at 25
percent).
✴
✴ Both retailers and individual sellers utilize the
Amazon.com platform to sell goods. Large retailers like
Nordstrom, Land's End and Target use Amazon.com to
sell their products in addition to selling them through their
own Web sites. The sales go through Amazon.com and
end up at Nordstrom.com, Land's End.com or Target.com
for processing and order fulfillment. Amazon essentially
leases space to these retailers, who use Amazon.com as a
supplemental outlet for their online sales.

Amazon Tools, Marketing and
Community

✴ The goal is pretty straightforward: "To be Earth's most
customer-centric company where people can find and
discover anything they want to buy online." The
implementation is complex, massive and dynamic.
Amazon's marketing structure is a lesson in cost-efficiency
and brilliant self-promotion. Amazon's associates link to
Amazon products in order to add value to their own Web
sites, sending people to Amazon to make their purchases.
It costs Amazon practically nothing. Some associates
create mini-Amazons -- satellite sites that do new things
with Amazon data and send people to the mothership
when they're ready to buy. Amazon Light, built and
maintained by software developer Alan Taylor, is one of
those satellite sites.
✴

The Gold Box

✴ There's probably a little "Gold Box"
icon at the top of the Amazon.com
homepage every time you visit. This
box holds special treats for you: Time-
sensitive discounts. Once you click on
the Gold Box and view an offer, you
have to complete the transaction (if
you want it) in a specified time period.
After that time period, the offer
disappears.

Finally

✴ But selling goods isn't the only way to make money with Amazon.com. The
Web site's affiliate program is one of the most famous on the Web.
Through Amazon's Associate Program, anyone with a Web site can post a
link to Amazon.com and earn some money. The link can display a single
product chosen by the associate, or it can list several "best seller" products
in a particular genre, in which case Amazon updates the list automatically
at preset intervals. The associate gets a cut of any sale made directly
through that link. The cut ranges from 4 percent to 7.5 percent depending
on which fee structure the associate signs up for (see Amazon Associates
for complete program details). The associate can also take advantage of
Amazon Web Services, which is the program that lets people use
Amazon's utilities for their own purposes. The Amazon Web Services API
(application programming interface) lets developers access the Amazon
technology infrastructure to build their own applications for their own Web
sites. All product sales generated by those Web sites have to go through
Amazon.com, and the associate gets a small commission on each sale.
✴
✴ Check out Amazon Web Services to learn more about what you can do
with Amazon's e-commerce platform.
✴
✴ In the next section, we'll take a look at how all of these programs and

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