ALL THINGS AMAZON

Amazon, Leader of Online Shopping, Innovation and Now Healthcare?

Originally developed to sell books, Amazon now sells products as diverse as electronics and video gaming to health and safety and baby products online and excels in the collection of data.  For many, selling on Amazon is a career, an entrepreneurial badge of honor. 

Fueled by its data collection efforts, Amazon has leveraged the data to learn, identify and develop new products, services, and opportunities for investment across a diverse range of interests.  Amazon has insinuated itself into the everyday life of consumers as well as businesses and proven itself to be a visionary organization, capable of encouraging change to resolve a spectrum of challenges. 

National Virtual Health Care Service Amazon Care Recently Launched Nationwide 

Here is some good Amazon news.  Without much fanfare, Amazon recently launched Amazon Care, a national virtual health care service to help make healthcare services more accessible across the United States.  In 2019, Amazon initiated a pilot program that was originally designed for its employees and their families in Washington state.  Amazon Care, a benefit for Amazon employees and employees of companies that participate in Amazon Care, recently has been expanded to all Amazon employees and their families in all 50 states.  In addition, the individuals who work for the companies that participate in Amazon Care as health care providers are also included.  If additional services are required, for items such as at-home care, extra costs may be incurred, depending upon the individual’s health plan.  Some health insurance plans work with Amazon Care and copays and deductibles may apply as with other insurance. 

Using the Amazon Care app, patients connect to medical professionals and usually will receive a response within one minute via messaging or video call.   All those insured through Amazon Care use the app to request in person or virtual visits 24 hours a day all year.  By leveraging the Amazon Care app, patients can reduce travel time, the time and frustration of waiting on the phone to reach a medical professional or waiting in medical offices.  Prescription delivery is handled through Amazon Prime. 

Amazon promotes an easy-to-use and access medical system.  As with traditional health care services, patients can select their medical professionals.  Medical professionals provide prescriptions through the app which are then delivered to the patient’s home, making trips to physicians and pharmacies unnecessary. 

Today, Americans are leaving urban counties in favor of rural areas.  According to a 2018 study conducted by Pew Research, 23% of rural residents report having problems accessing good doctors and hospitals, possibly because they live an average of 10.5 miles from the nearest hospital as compared to 4.4 miles in urban areas. 

Amazon Care may eventually be extended to the public and is part of a wave of corporations developing large scale healthcare initiatives to gain control and provide better health services for employees. 

New $1 Billion Amazon Investment 

Big Amazon News!  On April 22, 2022 Amazon announced it has established the Amazon Industrial Innovation Fund (AIIF).  Amazon will invest $1 billion in emerging technologies that improve supply chain, fulfillment and logistics efficiencies for companies.  Amazon specifically promotes and invests in leading edge technologies that aid in reducing cost and streamlining efficiencies, for operations and deliveries. 

Of foremost concern to Amazon is logistics efficiency.  As consumers have become increasingly demanding, expecting first two day, now same day delivery, Amazon is aligned with leveraging technology for this purpose.  AIIF will invest in companies capable of incrementally escalating delivery speed.   

Amazon is investing in the following businesses: 

  • Modjoul, wearable safety technology.  Company based in Greenville, S.C. 
  • Vimaan, computer vision and artificial intelligence for enhanced inventor management.  Company based in Santa Clara, CA 
  • Agility Robotics, bipedal walking robot designed to improve the mobility limitations and challenges of traditional robots.  Company based in Corvallis, OR 
  • BionicHIVE, autonomous synchronized robotic solutions that can be adapted to existing shelving racks and boxes in warehouse environments.
  • Mantis Robotics, tactile robotic arm that will leverage sensor technology to enable it to cohesively work alongside human workers

This investment is a follow up to the MARS and re:MARS conferences that Amazon hosts annually to encourage idea sharing between innovative professionals engaged in leading edge technologies such as machine learning, robotics, artificial intelligence, space and automation.  

Amazon has a strong interest in continuing to foster collaboration with technology companies to drive innovation and make a difference in all stages of operation. 

Amazon Announced its Next Step for Third Party Sellers:  Direct Access to Amazon Prime Members and Logistics 

In other Amazon news, over the course of the online shopping escalation during the COVID-19 pandemic, Amazon doubled the size of its expansive fulfillment network that includes warehouses, sortation and distribution centers and an air hub.  Amazon has a massive transportation and logistics network, and has contracted for dozens of airplanes and hundreds of delivery vans. 

By leveraging its considerable warehousing, transportation and logistics assets, Amazon can now offer third party sellers low-cost one-or two-day shipping anywhere in the United States.  Because shoppers will be using the Amazon payment gateway, customer order data will be visible, ideal to help Amazon improve product selection, user experience and marketplace operations. 

Because of the density of its assets, Amazon can schedule shipments out of warehouses and sortation centers at multiple intervals each day, critical for expediting customer deliveries. By ramping up shipment volume, Amazon expects to be able to drive down cost. 

Recently Amazon announced a new program: “Buy with Prime”.  This new Amazon business makes it easier for marketplace sellers that are participating in the Fulfillment by Amazon program to expand the Amazon experience to their own websites.  This would mean that over 200 million Amazon Prime members would be able to go to third party online shopping sites and take advantage of fast, free deliveries and returns.  This will open up the market of third party sellers to Amazon Prime members and likewise expand their businesses. 

Amazon Prime members will be able to place orders on Buy with Prime sites and check out easily without having to enter their payment and shipping information.  Third party sellers will be able to run their businesses from their own direct-to-consumer websites while receiving the benefit of a much larger audience.  Amazon announced that it developed Buy with Prime to work with most online stores and e-commerce platforms, such as BigCommerce. 

Amazon $30 Million Impact Accelerator Fund Started for Underrepresented Business Founders 

To address the funding gap between entrepreneurs from underrepresented backgrounds and investors, Amazon started the AWS Impact Accelerator and has committed to fund it with over $30 million over three years.  This fund will be used to help early stage start up businesses with LGBTQIA+, Black, Latino, and women founders and help initiate a rising tide to help fuel interest in similar entrepreneurial businesses.   

In addition to mentoring, training, and technical guidance, qualified start up businesses will receive up to $225,000 in a combination of cash and credits.  The qualified entrepreneurs will be introduced to Amazon teams and leaders, afforded networking opportunities with investors, and provided with support from advisors.  This program is ideal for those entrepreneurs who lack the support and investment of family, friends, and a business network. 

As part of the training program component of Impact Accelerator, entrepreneurs will participate in an eight-week training that includes dozens of available sessions.  Facilitated by both AWS start up experts as well as guest speakers, participating entrepreneurs will work on learning Amazon processes such as “working backwards” and “two-way door decision making” designed to improve executive actions and the development of flexible, innovative teams. 

Amazon’s Climate Pledge Fund 

In more Amazon news:  Started with a $2 billion investment from Amazon, the Climate Pledge Fund was developed to invest in companies which innovate products, services and technologies which protect our planet.  Investments in innovation will be accelerated to help facilitate the net-zero carbon economy needed for Earth’s future by 2040. 

Co-founded by Global Optimism and Amazon, there are now over 300 signatories to Climate Fund including business insiders: 

  • Mercedes-Benz 
  • Henkel 
  • Microsoft 
  • Verizon 
  • Best Buy 
  • Unilever 
  • Maersk 
  • SAP 
  • CLIF 
  • Weyerhauser 
  • Syneos Health 
  • Hardscape 
  • Letterbox Distribution 
  • Novartis 
  • Cognizant
  • Flor Americas 
  • Jungheinrich 
  • Lineage Logistics 
  • Salesforce 
  • SNC Lavalin
To support this effort, Amazon has started the Climate Pledge Friendly program to help consumers identify companies participating in this important effort.  The Climate Pledge Friendly label will designate these sustainable products.   There are 19 different sustainability certifications included in the program.  The Climate Pledge Friendly label indicates that the product has one or more of these certifications. 
Amazon Adjusts to Align with Current Capacity 

As disappointing Q1 2022 earnings caused Amazon stock to drop 10% last week, Amazon reported that it would make some adjustments to its warehouse expansion plans.  Increasing costs, inflation and a drop in sales were revealed to have resulted in the company not meeting projections. 

With the advent of the COVID pandemic in 2020, Amazon’s consumer business grew by 39%.  This required the company to double the size of its U.S. fulfillment network to meet the burgeoning demand. Built up over a period of 25 years, the network includes 110 active American fulfillment centers and 185 Amazon fulfillment centers globally. 

Over the past several years as online shopping has grown, Amazon has developed its own last mile delivery network, now known as AMZL.  AMZL depends upon dedicated Amazon Delivery Service Partners to be as independent as possible of third party delivery service providers including USPS and UPS. 

To reduce its dependence on air carriers, the company launched Amazon Air with new gateway operations in: 

  • Los Angeles CA 
  • New Orleans LA 
  • Austin TX
  • San Juan Puerto Rico 
  • Richmond VA
  • Maui and Kona  
and air hubs in: 

  • Lakeland FL 
  • Baltimore MD 
  • Rockford IL 

Both the gateway operations and air hubs process volume from Amazon fulfillment centers through to the point of processing the goods for last mile delivery. 

With Amazon Air operations at over 35 U.S. airports, Amazon is well-positioned to facilitate rapid delivery across the country. 

Amazon and Amazon Web Services (AWS) 

Amazon Web Services are widely used for cloud computing and include the following product offerings: 

  • Website hosting 
  • Search engines 
  • Content delivery and media distribution 
  • Social networking 
  • Application hosting/SaaS hosting 
  • Storage, backup, disaster recovery 
  • Media sharing (Image/video) 
  • Development and test environments 
  • Mobile and social applications 
  • Academic computing 
Known to be the world’s “most comprehensive and broadly adopted cloud platform, offering over 200 million fully featured services from data centers globally, AWS is now a significant portion of Amazon’s extensive business portfolio and most lucrative profit driver, accounting for over 13% of Amazon’s total net sales. 
Amazon and Automobiles 

Amazon News about Rivian and Stellantis: 

In 2019, Amazon contracted Rivian to manufacturer 100,000 electric delivery vans by 2030. Ford invested $500 million, and Amazon invested $440 million into Rivian. Three sizes of vans are being developed, to carry 500, 700 or 900 cubic feet of packages. 

Amazon recently reported that it will be providing its “in-car dashboard software and cloud services” to Stellantis (formerly Fiat Chrysler) for its vehicles.  Amazon is slated to be Stellantis’ first commercial customer for its Ram ProMaster battery-electric vehicle due out in 2023. 

Today, Amazon controls over one third of the cloud market, nearly double that of its next closest competitor. 

Conclusion

Amazon is a complicated company with a big vision and multiple interests.  From Amazon Prime, box office favorites on Prime Video, Amazon Smile, Amazon Music, Amazon Fresh and Whole Foods Market, Amazon Games, Amazon Kindle, the variety of Amazon shopping and selling options as well as Amazon Seller Central, one would not expect the company to innovate in other areas beyond online shopping and box office blockbuster entertainment.   

With its specialized leading edge artificial intelligence and other technologies powering offerings such as its mobile apps, data collection expertise, cloud computing services, and sales processing of millions of products on Amazon, the company is at the forefront of daily life in America, fast-paced, efficient, and accurate. 

The successor to Jeff Bezos, Andy Jassy introduced new leadership principles, not all favored by Amazon employees.  With new leadership, the world will have to wait and see how the Amazon vision develops. 

Amazon Business constantly focuses on innovation and improvement, determined to improve the quality of life as well as business and supply chain logistics operations. 

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