Selling everything from A to Z, Amazon is the world’s third-largest retailer. You’d be hard-pressed to find anyone who hasn’t bought something from the online superstore, but Amazon hasn’t always been the company it is today. Many of us forget that the company started in a rented Seattle garage, and that at one point, only sold books.
Amazon’s CEO Jeff Bezos’ philosophy has always been to “get big fast.” And while it doesn’t seem that Amazon could get any bigger, it's likely it will continue to find ways to do just that. Amazon could even become the first company to earn a $1 quadrillion valuation.
Stacker put together a brief history of Amazon, highlighting the company’s most defining moments from its humble origins to its $1 trillion market cap. Here’s everything you never knew about the global powerhouse.
After a cross-country move from New York City to Seattle, Washington, Jeff Bezos opens Amazon.com on July 5, 1994 in the garage of a rented house. Originally called Cadabra.com (as in "abracadabra"), Amazon is only the second online bookstore, born of Bezos' brilliant idea to capitalize on the Internet's 2,300% annual growth.
Following the beta launch of Amazon's official website (designed by Amazon's first employee, Shel Kaplan) a handful of friends and family members place orders designed to help test and troubleshoot the system. On July 16, 1995, the first “real“ order is placed: a copy of "Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought" by Douglas R. Hofstadter.
From its first weeks, Amazon makes sales in the tens of thousands of dollars. By the end of 1997, however, the company is still not profitable. Bezos explains to investors that he planned on deferring profitability for up to five years to work on building infrastructure and technology. While this puts investors on edge, it doesn't scare them away entirely. In November 1997, Amazon opens the first of its fulfillment centers in Delaware.
At the end of 1997, Jeff Bezos hand-delivers Amazon's one-millionth order: a major milestone for the company. The order is placed by a customer from Japan, who purchases a Microsoft Windows NT manual, and a biography of Princess Diana.
By December 1999, Amazon has shipped more than 20 million items to all 50 states and more than 150 countries around the world. Time magazine honors this accomplishment by naming Jeff Bezos its Person of the Year. He's dubbed the “king of cyber commerce“ and is the fourth-youngest person to be recognized by the magazine (35 at the time of publication).
Amazon stays above the fallout of the dot-com bubble burst that has affected competitors for months. In January of 2001, however, it finally begins to feel the effects. Amazon lays off 1,300 employees, closes a Seattle call center and distribution center, and downsizes operations at its Seattle warehouse in the same month. Investors worry whether the company will survive.
In 2002, Amazon begins selling clothes. The company's millions of users help gain a foothold in the fashion industry. Amazon partners with 400 apparel brands in a bid to appeal to a diverse range of customers.
The company launches its web hosting platform in 2003 in an effort to make Amazon profitable. Licensing its website to other companies like Borders and Target, Amazon.com quickly becomes one of the biggest cloud hosting companies in the market. Web hosting now makes up a huge portion of their annual revenue.
Record holiday sales in 2003 finally put Amazon in the black. For the first time, nearly a decade after its founding, Amazon.com makes a profit of $35.5 million. Compared to the close of 2002 (a loss of $149.1 million), this is a huge milestone for the world's largest online retailer.
In a pricey landmark deal, Amazon buys Chinese retail giant Joyo.com in August 2004. The $75 million investment gives the company access to a major market, and Amazon begin selling books, music, and videos through the platform.
As of March 2018, Amazon has an estimated 90 million Prime subscribers. For $119 a year, subscribers get free two-day shipping and access to a host of movies and TV shows, along with a range of other benefits. When the loyalty program first launches in February 2005, subscribers only pay $79 a year, and benefits are limited to free two-day shipping.
Amazon's first branded product, the Kindle, launches in November 2007. Featured in Newsweek magazine, the first-generation Kindle is dubbed "the iPod of reading," and costs $399. It sells out within hours, sparking demand for digital books.
Amazon looks to dominate the print and digital book markets as well as audiobooks. In January 2008, Amazon outbids Apple to acquire audiobook giant Audible for $300 million.
In 2012, Amazon buys robotics company Kiva. The company manufactures robots that move packages weighing up to 700 pounds. The robots cut the fulfillment centers' operating costs by 20%, and drastically improve efficiency—creating an even wider gap between the giant and its competitors.
As of February 2018, Amazon employs 566,000 people worldwide. Many of these jobs qualify as middle-class, which is why in President Obama chooses to deliver a 2013 economic policy speech in an Amazon warehouse. He praises Amazon as an example of a large company doing its part to rebuild the economy.
Mail usually isn't delivered on Sundays, but in late 2013, Amazon works out a confidential deal with the U.S. Postal Service to have USPS carriers deliver their packages all weekend long. The first company to make this type of deal, Amazon's goods are finally available to their customers 24/7.
An uncharacteristic misstep, Amazon's Fire Phone is released in June 2014. Factors like its price ($650 without a contract) and a lack of popular apps (like Google Maps or Starbucks) render the phone a flop with consumers. In the end, Amazon loses more than $200 million on the unpopular device.
Amazon buys Twitch Interactive Inc., a new video game streaming company, for $970 million in cash. The acquisition bolsters Amazon's growing game product division, and pulls the entire gaming community into its orbit.
Many consumers view the opening of Amazon's first brick and mortar bookstore as an ironic twist of fate. The tech giant has long been blamed for the decline of independent bookshops, and when its first location opens in Seattle—with lines around the block—people have a lot to say. Today, there are 15 Amazon bookstores around the country.
While Amazon dominates almost all of the markets it enters, the company has long struggled to gain a foothold in the highly competitive grocery business. In 2017, Amazon buys all of Whole Foods' 471 stores for $13.4 billion. Amazon has since integrated the two companies' distribution systems, and combined discounts to loyalty members of both stores.
In a historic moment, Amazon crosses the $1 trillion valuation threshold in September of 2018. The second company in history to meet that benchmark (Apple hit it only months before), Amazon hasn't consistently remained above $1 trillion. Nevertheless, it's wavered around the 13-digit mark ever since.
Jeff Bezos has been the world's richest man for years. He's also faced heavy criticism over employees' wages. In early 2018, the company's median wage was $28,446. Challenged by progressive leaders, Bezos announces in October that the company's minimum wage would be raised to $15—almost double the country's minimum wage.
On November 13, 2018, after almost a year-long search, Amazon announces that its new headquarters (HQ2) will be split between New York City and Virginia. Hundreds of cities put in bids for the $5 billion project and its promised 50,000 jobs.
However, on Feb. 14, 2019, Amazon announced it was scrapping its plans for the Queens-based campus due to intense opposition from local politicians and activists. The company will move forward with the Virginia campus.