Is Amazon.com Still a Dot-com Company?

Amir Syafrudin - 1306346771

Considering that Amazon.com puts up all of its stores online, it is quite surprising to see that
the company is speeding up in building new warehouses. It has spent a huge amount of
money to build its warehouses. During its warehouse building spree, Amazon.com has
invested roughly $13.9 billion since 2010 to build 50 new warehouses, more than it had
cumulatively spent on storage facilities since its 1994 founding, bringing the total to 89 at
the end of 2012. This push towards building a higher capacity is a move made by
Amazon.com to further enable two-day delivery or same-day delivery for its customers;
especially its Prime customers. It is a move made by Amazon.com to keep rivals such as EBay
and Wal-Mart Stores from peeling off customers. (Kucera, 2013)
Putting delivery capabilities aside, can Amazon.com still be considered a dot-com company
when its physical presence (provided by its warehouses) continue to grow? The answer to
this question depends on how we define the word dot-com itself. InvestorWords defines
dot-com as follows:
A company whose operations are entirely
or primarily
internet-based, or
more specifically a company whose business model would not be possible if
the Internet did not exist. Dotcoms often deliver all their services over an
Internet interface, but products might be delivered through traditional
channels as well. (dot-com, n.d.)
Based on the above definition, we can easily say that Amazon.com will still be a dot-com
company no matter how many warehouses it builds. No matter how much or how big its
warehouses to date, the core business process of Amazon.com still runs on top of the
Internet. Amazon.com still sells its goods directly to consumers through its online stores.
Even though Amazon.com was reported to open pop-up stores, kiosk, vending machines, or
even lockers in public places, theres still no solid proof to claim that the e-commerce
giant are interested in opening up physical retail stores (Bishop & Soper, 2014; Casey,
2012).
The warehouse building spree was not about physical presence. The reason Amazon.com
build so many warehouses was to make sure that they are able to commit to their words
regarding speed of deliveries. With the product stored in its own warehouses, Amazon.com
has more control over distribution and deliveries. At the end, it was all about alleviating
shopping experience, improving customers trust, getting new customers, and last but not
least, retaining existing customers from switching to rivals. The warehouses was simply an
expansion of its capability to create a stronger foundation for an existing business model,
which is online retail stores.
That being said, one might argue that Amazon.com is aiming for a brick-and-click1 business
model, which includes both online and offline operations ("Click and mortar definition",
n.d.). Unfortunately, the same argument applies. Warehouses meant for attaining a certain
service level of deliveries doesnt qualify for offline operations. Amazon.com still does its
business on the Internet. It is not a brick-and-click because it still maintains a pure Internet
business model. Thus, Amazon.com is still a dot-com company.
1

Also known as click-and-brick or click-and-mortar among several others.

REFERENCES
Bishop, T., & Soper, T. (2014, January 9).
Surprise: Amazon tests physical retail with 'Kindle
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Casey, K. P. (2012, August 21).
Is Amazon going bricks-and-mortar?
Retrieved March 11,
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Click and mortar definition. (n.d.). In
Investopedia
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Hoffelder, N. (2013, November 30).
Amazons first retail store is here today, gone tomorrow.
Retrieved March 11, 2014, from
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day-gone-tomorrow/#.Ux5iq_mSxCg
Kucera, D. (2013, April 29).
Why Amazon is on a warehouse building spree.
Retrieved March
10, 2014, from
http://www.businessweek.com/articles/2013-08-29/why-amazon-is-on-a-wa
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