Nearly 40 cents out of every retail dollar Americans spend online now go to Amazon—the company commands a full 4% of U.S. retail as a whole. Three-quarters of a million workers earn a living through Amazon, and more than 100 million Prime subscribers consider Amazon their online home base. Although they've long enjoyed free two-day shipping, Prime members now also get a massive library of entertainment, e-books, grocery services, cloud storage, and gaming. The early investors who bought into the company when it first went public rode a wave of nearly unprecedented growth—those who made an initial investment of just $1,000 are now millionaires.
Amazon is ranked among the five biggest corporations in America, and its founder is the richest human being on Earth. It's responsible for starting a trend that cracked the foundations of traditional retail and changed the way things are bought and sold. Former giants like Sears and Toys "R" Us have crumbled under the pressure of e-commerce, a revolution that Amazon stoked more than any other single entity—but it wasn't always that way.
When Jeff Bezos founded Amazon in his garage in 1994, the company he launched wouldn't be profitable for years to come. It was part of an avalanche of new tech startups riding a wave of new and uncertain technology—most of them would quickly go bust. It started with an idea to let people browse and buy books from their computers instead of going into physical bookstores and choosing from the limited selection they found inside. It was a revolutionary idea, and Amazon soon became the world's biggest bookstore. Then it became the "Everything Store." Later it became a wealth-generating machine, with tentacles reaching everywhere from electric vehicles and cloud computing to production studios and grocery stores. It's heavily scrutinized and controversial—plans to open new headquarters recently sparked both ferocious bidding wars and fierce political blowback at the same time.
Stacker compiled a list of key moments in Amazon's history and its current business from a variety of sources. Here's a look at the events that turned an online bookstore into a global conglomerate and a self-made entrepreneur into the world's richest man.
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When Jeff Bezos founded Amazon out of his Seattle garage in 1994, he set himself on a path to become the richest man in the world—he's now worth $128 billion. It was the beginning of a company that would change the way people buy and sell things around the globe and spell doom for traditional retail stores in the coming decades.
When Amazon went public in 1997, it had 256 employees and was still known as "Earth's Biggest Bookstore." Its stock price at the time of its initial public offering was $16 per share, and that the public could now buy into the company injected it with a massive influx of capital to grow and expand. Today, Amazon's stock is worth more than $2,000 a share, and original investors have earned over 113,000% when the stock's multiple splits are factored in.
Amazon's first significant acquisition was IMDb, which it bought for about $55 million. The move made Amazon more than just an online bookstore and positioned it for a run as a multimedia conglomerate. Today, IMDb is still one of Amazon's most popular subsidiaries, attracting over 190 million monthly users and holding the title of the most popular movie website on Earth.
Amazon lost money for its first few years as a public company, not turning a profit until the fourth quarter of 2001, when it booked a paltry $5 million in the black. It reflected Bezos' philosophy that investing in the future was more important than meeting quarterly earnings targets. It remains the company's foundational financial philosophy.
In 2000 and 2001, when Amazon first experimented with offering free shipping on large orders during the holiday season, the company realized that shipping costs were one of the main barriers to people buying things online. That year, Amazon introduced Free Super Saver Shipping, which offered free shipping on orders over $99—that would soon drop to $49, then $25. It was the genesis of Amazon Prime and the modern shipping wars.
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By 2005, Amazon determined that the company that dominated online retail would be the one that not only shipped for free but shipped fast for free. To get customers to spend more, it launched Amazon Prime, which cost $79 a year and promised free two-day shipping on most items. Not only did Prime force all other retailers to compete on shipping, but it spawned legions of Amazon loyalists who, after already having subscribed to Prime, considered Amazon their home base for online shopping.
By 2006, broadband Internet was becoming a mainstream service, and Amazon entered the cloud infrastructure space with Amazon Web Services. AWS launched with little fanfare, but soon dominated the sector and became one of Amazon's most powerful limbs. AWS now does $10 billion a year in annual sales and owns over 30% of the market, more than its next three closest competitors—Google, Microsoft, and IBM—combined.
Unlike tablets and smartphones, which do everything in one device, the Amazon Kindle was purpose built only to deliver a superior reading experience for digital books. In developing the Kindle e-reader, Amazon returned to its roots as an online bookstore and reasserted itself as the single-biggest name in reading in the modern era.
In 2007, Amazon attempted to do with grocery shopping what it did with retail and books—make the physical store an obsolete relic of the past. Grocery-delivery service AmazonFresh rolled out gradually at first—it's still not available everywhere—but it was the start of Amazon positioning itself as a giant in the grocery industry in the following decade.
By 2010, streaming media was clearly the wave of the future, with streaming companies producing original content to compete with major studios and networks like HBO—and Amazon would not let that future belong to Netflix or its competitors without a fight. That year, it launched Amazon Studios, which has since produced notable films such as "Manchester by the Sea" and "You Were Never Really Here." Its TV shows include titles such as "The Marvelous Mrs. Maisel."
[Pictured: The primary cast from the Amazon Original "The Marvelous Mrs. Maisel."]
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By 2014, Amazon's massive cloud infrastructure was robust enough to handle Twitch, a gaming streaming service known as the YouTube of video games. The $970 million purchase gave Amazon a service with 15 billion minutes of content and 55 million users who spent more than 100 minutes per day logged on. Amazon was now a gaming giant.
On June 16, 2014, stocks for grocery store companies plummeted when Amazon announced it would purchase Whole Foods for $13.7 billion. While Whole Foods was not juggernaut in the grocery space, the move meant Amazon was no longer dabbling in groceries as a niche service. The world's mightiest online retailer was now a full-fledged player in the brick-and-mortar grocery store business.
In 2018, Amazon introduced a physical space unlike any other in the world, a bizarre and enthralling combination of space-age tech and natural bounty reminiscent of a rainforest. The Spheres, a connected cluster of greenhouse globes filled with both ordinary and exotic plants are a biodome retreat in the heart of urban Seattle for the exclusive use of Amazon's 40,000 regional employees. To its home city of Seattle, Amazon brought a touch of the Amazon.
In 2018, Amazon announced the new locations of its massive move to split up its North American corporate headquarters. The winners were a multi-city swath of Northern Virginia and Long Island City, New York. In exchange for billions in tax incentives, Amazon would bring tens of thousands of jobs to the two communities.
Although New York had pushed hard to attract Amazon, the company's Long Island City venture was controversial from the start. Unions, community activists, and local elected officials expressed concerns that Amazon's presence would drive up home prices, gentrify the neighborhood, and muscle out the poor. Even more concerning were accusations that the city's mayor and state's governor had conspired in secret to give billions to Amazon when that money was desperately needed for community programs. The firestorm was drawn along sharp political lines; the community was divided, and on Valentine's Day 2019, Amazon withdrew from the deal.
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In 2019, Amazon expanded even farther away from its humble beginnings as an online bookstore when it invested $700 million in Rivian, a Michigan-based electric vehicle startup and direct threat to Tesla and longtime Bezos rival Elon Musk. Just as it had been an early player in the e-commerce, free-shipping, cloud computing, and streaming-media revolutions, the move proved once again that Amazon would spend big to get in on the ground floor of the next big thing.
In 2017, Jeff Bezos began giving massive budget allocations to Amazon Studios to buy the rights to the blockbuster "Lord of the Rings" franchise. The effort was the start of a push to position Amazon Studios at the top of the original content pyramid with the likes of HBO and Netflix. That effort culminated with an investment upwards of $6 billion in 2019.
What started as an idea to sell books through an emerging technology called the Internet in 1994 would earn Jeff Bezos the title coveted by ambitious entrepreneurs since time immemorial: the richest man in the world. Bezos' fortune is now estimated at $128 billion.
The Fortune 500 is a list of the 500 largest corporations in the United States, which combine to represent two-thirds of the U.S. GDP, a cumulative $13.7 trillion in revenue, and 28.7 million employees. On that list, only Berkshire Hathaway, Apple, Exxon Mobil, and Walmart stand in front of Amazon.
Thanks mainly to the rise of Amazon, online retail is growing at three times the rate of overall retail. That dynamic, which Amazon was the driving force behind, has given Amazon a full 4% of all retail spending in the United States.
"Fulfilled by Amazon" is the stamp of approval buyers want to see when they order something on Amazon. The promise that comes with it is made possible by Amazon's 175 massive—150 million combined square feet—and high-tech fulfillment centers. In the mid-1990s, Amazon's single warehouse also contained its office.
In 2019, Amazon added 100,000 workers in three months. Today, about three-quarters of a million people collect a paycheck from Amazon—and over 30,500 openings are listed on the Amazon careers page.
What started as an idea to create brand loyalty and repeat customers through a subscription-based service for free shipping has now grown to include a massive library of streaming video and music, as well as a library of books, a personal photo service, cloud storage, grocery services, and same-day or even same-hour free shipping. Amazon Prime subscriptions have now topped nine figures.
Any organization that consolidates as many products and services, commands as much of the market share, and wields as much political clout as Amazon is bound to attract the wrong kind of attention. Amazon is now facing a Federal Trade Commission antitrust investigation into allegations it's using its considerable muscle to harm competitors.
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