Amazon also established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organiza-tion to manage the online presence of these large retailers. However, it also uses its distri-bution system to deliver the products. The Circuit City arrangement was slightly different from the others—customers could pick up their items directly from their local stores [Heun August 2001]. After Circuit City went under, the relationship ended.
By mid-2003, the Web sales and fulfillment services amounted to 20 percent of Ama-zon’s sales. Bezos points out that most companies realize that only a small fraction of their total sales (5 to 10 percent) will come from online systems, so it makes sense to have Ama-zon run those portions [Murphy 2003].
Amazon also established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organiza-tion to manage the online presence of these large retailers. However, it also uses its distri-bution system to deliver the products. The Circuit City arrangement was slightly different from the others—customers could pick up their items directly from their local stores [Heun August 2001]. After Circuit City went under, the relationship ended.
By mid-2003, the Web sales and fulfillment services amounted to 20 percent of Ama-zon’s sales. Bezos points out that most companies realize that only a small fraction of their total sales (5 to 10 percent) will come from online systems, so it makes sense to have Ama-zon run those portions [Murphy 2003].
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