If you’re reading this, chances are you’ve at least heard of Amazon.com, and even more likely, you’ve used it frequently to purchase your favorite products without even having to run to the store.
However, Amazon wasn’t always a global phenomenon that you’d be hard-pressed to find an alternative to. It started as a book distribution company in the garage of a man with an idea, and after a few years of struggles, it exploded into a multi-billion-dollar company covering multiple industries and product categories; all the while making amateur investors who stuck with the AMZN stock millionaires in the process.
The story of Amazon.com is a long one that doesn’t show any signs of stopping, and it’s a valuable learning experience for those who aim to achieve great things without the most advantageous circumstances working in their favor.
Let’s get started with the company’s early history and what triggered its creation. Then, we’ll follow up with the meaty details of its high-value stock and how the market is trending.
Getting Ahead of the Curve
In 1994, the internet had only been publicly available for a few short years in a way that even remotely resembles the internet we know today. As such, it was still a budding technological advancement that many companies were refusing to get behind in favor of more traditional business avenues.
Amazon’s founder, Jeff Bezos, saw this as an opportunity to get ahead of the curve and take advantage of what was bound to be revolutionary for society as a whole.
Shortly after recognizing the opportunity, the soon-to-be founder left his position at a Wallstreet hedge fund firm to begin setting the groundwork for a way to not only jump on the internet’s upward trend but to also streamline the buying experience and establish himself as a tech authority.
This led to a $10,000 initial investment on Bezos’s end, and a $250,000 investment on behalf of his parents. The idea was to become an easy-to-use book broker that allowed one online storefront to facilitate transactions between any book retailer and customer in the world without needing to hop between various websites.
Amazon’s Earliest Successes
A fledgling Amazon.com quickly grew in popularity between its inception in 1994 and 1996, and near its first massive change in 1996, it was generating more than $20,000 in profit each week. This massive success made it eligible for public trading, and the company made the transition in 1995, and its first shares began to sell at $18 each at the beginning of 1996.
With the addition of public trading raising Amazon’s value as a company, expansion became a priority for its leadership. During this period, Amazon saw both massive success and its fair share of legal troubles.
The success of the mid-to-late ’90s came in the form of expanded product selection that would set the framework for two of the company’s most popular features. Amazon began to create the framework to move past literature and into CDs and DVDs. This was a boon to the company that saw its annual sales soar, and it worked as the catalyst for Amazon’s current-day streaming services that are packaged with Prime.
There was also an attempt to further develop its connections with literature by publishing unknown authors, but the service was underwhelming and didn’t last long. That’s something that has changed in recent years, but we’ll talk about that later.
As mentioned, the period between 1996 and 2000 wasn’t entirely positive for Amazon. The company ran into two legal disputes that forced the company to rethink its internal workings.
First, Barnes and Noble took issue with the slogan “The world’s largest bookstore” given Amazon’s business model was drastically different than any bookstore at the time. This was settled out of court but resulted in the slogan being removed from the brand’s identity.
Secondly, Walmart initiated a lawsuit against Amazon due to the hiring practices of the company at the time. Amazon was enlisting former high-level Walmart employees and inserting them into some of the company’s most integral positions. This put the former Walmart employees in a position to release trade secrets, and while the suit was handled out of court, Bezos and the rest of Amazon’s leadership were forced to change their hiring practices to prevent further issues.
The Early 00’s and the Beginning of its Modern Iteration
The early ’00s is when Amazon first began to truly resemble what we all know Amazon as, today, and it was the catalyst for a massive climb in stock value that made many steadfast investors far richer than anyone would have thought.
With the success of its expansion into CD and DVD sales in 1998, Amazon leadership took things a step further with the addition of clothing products in the early ’00s, and the site began to partner with third-party retailers. While the site was still fairly young, it was beginning to finally look like the site we’ve all come to know and love today.
Notably, the early ’00s also saw the creation of Amazon Prime, which like its modern version, allowed subscribed users to receive free shipping on physical products, as well free access to some of the earliest digital-only products that now dominate the site’s marketplace.
While it’s interesting that the company implemented many of its most popular features during this period, the most important event for the company was its survival of the 2000 .com bubble that led to most other online retailers going bankrupt and shutting down.
Amazon itself was at risk during this period, and the majority of its shareholders, both average people, and large investment firms sold their stock to avoid losing their investments upon Amazon’s inevitable closure.
However, with steadfast resolve and savvy business maneuvers, Amazon was able to squeak by during the bubble burst and emerged as one of the internet’s most user-friendly and accessible online marketplaces.
This unlikely stroke of luck was the catalyst for the company’s current hold on the online transaction business, and without it, the site might not have grown to even a fraction of its current size and fiscal power. As an added bonus, the shareholders that held throughout the bubble were rewarded with skyrocketing stock value; many of whom saw a 2000% increase on their $18 per share investments.
The Company We Know Today and Its Future
As we all know, Amazon is now THE marketplace for just about everything. No longer a simple book broker or place to find obscure CDs, Amazon is a publisher, streaming service, and the most streamlined marketplace on the web where nearly any product can be found by multiple sellers at various prices.
The company is also one of the United States’s largest employers after showing exceptional growth from 2011 to 2016, and actively employs more than 556,000 individuals across its many warehouses and minor establishments, and headquarters.
What was once a small book broker located in a Washington garage is now worth $386-billion and, while somewhat controversial, functions as the best online retailer on the planet. As of the time of this writing, this trend continues to skyrocket due to the ongoing Covid-19 pandemic and its effects on physical retail establishments.
In fact, the Covid-19 pandemic pushed Bezos into the number-one spot for wealthiest man on the planet, and after a brief back-and-forth with Elon Musk, an ongoing rivalry with no end in sight, Bezos managed to retain that position almost solely due to the dramatic increase in online sales.
However, that isn’t the most interesting facet of this company’s story. Despite finding unparalleled success as an online distribution platform and retailer, Amazon is already gearing up to take on multiple, completely irrelevant, industries.
The project that will most likely affect everyday people like us is Amazon’s new, employee-free, general store. This endeavor has already entered its earliest test phases with multiple unmanned locations in the United States, and hundreds of locations are planned to be opened in the near future. These stores utilize the latest smart technology to let shoppers enter the store, track each item wanted by simply placing them in their carts, and cash out seamlessly with a pre-setup account. Anti-theft measures are also implemented with the same technology, as the store can track when shoppers pick up or return items without having to scan anything.
Currently, these stores only function as basic general stores, but there are plans to create grocery stores that function identically.
The company’s tech advancements also include a massive push to create Amazon’s own satellite constellation which can be used for a multitude of applications, including further development of the online store’s capabilities, and unmanned delivery options such as drones and smart, driverless vehicles.
The push for Amazon’s own space endeavors led to a race with fellow business mogul Elon Musk. However, Musk has spent years furthering his own space program and initiatives, and the race was short-lived with Amazon coming up short. The program is still in development, though.
While not necessarily the mind behind drone technology or driverless vehicles, Amazon has been a driving force behind both forms of technological advancement; financing several high-profile projects to bring the tech in line with Amazon’s needs and goals. This is expected to not only change the way deliveries are made by Amazon’s service, but also revolutionize multiple service industries as a residual effect.
Finally, this continued drive to improve and expand has set Amazon apart from nearly all its competition, and it has allowed the company to remain a profitable, if not expensive, investment option. We’ll dive into that more in the following section.
AMZN: One of the Most Reliable Stock Investments on NASDAQ
If you’ve spent any amount of time looking at or investing in the stock market, you probably know that Amazon shares are among some of the most valuable on the NASDAQ exchange, and while AMZN does occasionally dip, it’s one of the most reliable stocks to be invested in.
AMZN’s Close Brush with Death
The 1996 release of Amazon’s public shares was the first, and one of the most important, changes for the company, and shares were sold for a mere $18 per share upon their initial release. The sudden boost in funding was enough to drive multiple company-wide developments and led to the success shareholders enjoy today.
However, despite a quickly accelerating growth with each new advancement in the company, the .com bubble of 2000 saw its stock value plummeting along with the values of most other online retailers.
As we mentioned earlier, this bubble, and its eventual burst, cost AMZN the majority of its shareholders due to a lack of confidence that the company would survive the bubble crash; let alone turn into a profitable company.
The stock then quickly rebounded as Amazon managed to stay afloat, and the original investors who continued to hold stock benefited from a massive boost in share value. In fact, individuals who invested a relatively small $10,000 at the time of the company’s IPO, or initial public offer, now hold stocks worth more than $12-million. While most small-time investors didn’t see profits quite that high, stockholders saw massive gains across the board.
This boost in share value was quickly followed by Amazon’s transition into being a profitable company. The profit margin was abysmally small at first, netting only one-cent per share, but it was a sign of things to come.
AMZN’s survival of the .com bubble, and its quick acceleration afterward, serves as a lesson for modern investors. While it can be a risky business, holding onto shares for a company that consistently shows its ability to innovate can lead to once-in-a-lifetime investment opportunities. It is important to note that investors who held their stakes in the company made a calculated risk based on the company’s exceptional history up to that point. It was far from blindly trusting the company.
Why AMZN is Reliable (And High-Value)
As any company grows its influence and corners a market, its public trading value grows. This is one of the keys to AMZN’s long-standing position as a sure-fire bet and consistent growth. It consistently pushes itself further and expands into other, more revolutionary, endeavors. This constant push instills confidence in investors both small and large as it nearly insures the value of shares will continue to grow. As of the time of this writing, AMZN has seen an annual growth of 38% due to its reputation for pushing the envelope, as well as the points we’ll discuss next.
Well-maintained stock values are another reason shareholders are so confident in AMZN’s ability to produce results. All stocks dip and level out occasionally, but AMZN has consistently held within the $2000-$3000 range throughout the twenty-teens. It has even managed to weather each drop in the market throughout the same time period with minimal value loss. This long-standing share value is a sign that minimal risk is involved with the investment, and the addition of AMZN’s reputation for bouncing back helps to maintain shareholder confidence.
Finally, beyond Amazon’s advancements or AMZN’s reliability, a lot of the stock’s value comes from the sheer lack of shares available. Since its inception, Amazon has minimized splits of its AMZN stock, and this leaves relatively few shares available for such a massive influence on the market as a whole.
Since the demand for AMZN continues to climb, but the number of shares remains relatively low, investors are practically forced to pay top dollar for the perks of investing in such a surefire profit opportunity. There are ways around that, though.
Utilizing AMZN Without the Buying Power of an Investment Firm
After learning about Amazon’s history and developing an understanding of why it’s such a sought-after stock, you might be looking to toss your own hat into the AMZN ring. Unfortunately, the current price is enough to make most new investors shy away without taking a second glance.
As of the time of this writing, a single share costs roughly $3305 USD. That’s hardly something the average person can scoff at, and waiting for a dip isn’t a much better option as the stock rarely drops below $2500 per share. In essence, the same traits that make AMZN so desirable are also what excludes most investors from contributing to the company.
Luckily, there is a way for new investors, who don’t have the same buying power as the largest investment firms do, to get in on the action and enjoy adding some reliable stock to their portfolios.
This is done through a brokerage such as Robinhood, Charles Schwab, and other online brokers that function as middlemen for day traders. These options are extremely popular with individual investors from all walks of life, and they make it easy to maintain a portfolio of stocks without diving into all the complexities that come with directly trading on any given exchange. Also, you can access each broker’s app through your smartphone or on a desktop computer; making it even easier to build a portfolio without experience.
In regards to AMZN, you can use these brokers to purchase fractional shares, which are exactly what they sound like. They’re a fraction of a whole share. Most brokers have minimal investment amounts depending on which stock you’re looking at, and AMZN usually has a minimum buy-in of $150-$200. That’s may seem a little steep, but it’s a lot more affordable than spending $3000 out-of-pocket for a whole share.
The main benefit of owning fractional AMZN shares is that, while you likely won’t make millions when the company climbs in value, you will most likely see consistent growth each year without much risk. This can be used to offset the risk of other shares or to simply build a small nest egg over the long term.
In contrast, the slow growth and low monetary value of fractional stocks mean that even with AMZN, you’re basically locked into a long-term investment if you want to make a reasonable profit. Brokers also take a commission whenever you withdraw your profits.
Regardless of the drawbacks, fractional AMZN shares are a viable option for those who are just starting to build their portfolio and want to add big, reliable names without devoting their life’s savings to it.
Covid-19’s Effect on AMZN and Predictions for the Future
At this point, the Covid-19 pandemic has affected everyone and everything in one way or another. While a lot of business owners have watched their companies come close to the brink, or close outright, that’s not the case for Amazon. Amazon actually had one of its best years yet due to the pandemic, and that has been reflected in its stock prices; and the heavily padded pockets of its shareholders.
While the AMZN stock was more or less leveling out for a while before 2019, the pandemic kicked off a massive surge in online purchases. As the world’s largest and most recognizable online marketplace, Amazon became the go-to source for most necessities. The prevalence of government-provided stimulus checks in most countries also led to an increased amount of online purchases, and AMZN quickly skyrocketed.
This pushed Amazon as a company across the $1-trillion benchmark, and the AMZN stock became one of the most highly sought-after stocks available next to Tesla and other stockmarket superpowers.
As the effects of the pandemic begin to diminish, and the majority of people return to their everyday lives, the prevalence of online sales is expected to drop dramatically. This may or may not have an impact on AMZN’s high value.
Fortunately, AMZN’s stability will most likely work in its favor and prevent a dip from being too damaging to shareholders, and the multitude of high-profile projects Amazon has in the works almost guarantees that any dip in value will quickly rectify itself.
Jeff Bezos: The Man Behind Amazon
Jeff Bezos wasn’t always the mind behind the world’s largest retailer. While his beginnings weren’t incredibly humble, he was a normal, upper-middle-class American at one point.
Obviously, this changed very quickly throughout the ’90s and early 2000s, and now he’s currently in a back-and-forth financial race against the likes of Elon Musk and Bill Gates for the richest man in the world.
While the story of Jeff Bezos is hardly a tale of someone starting from the bottom and working their way up, he did start from the position of a relatively normal person and made the decisions necessary to get where he is today. As such, there’s a lot to learn from his mindset, how he approached the business world, and his financial maneuvers in general.
You’ve learned all about Amazon and its stock at this point. Now, let’s dive into the man who made it all possible and his incredible stroke of both luck and genius.
Education and Early Career Choices
Born in 1964, Jeff Bezos didn’t originally plan his career around the internet. He was born into upper-middle-class America in Alberquerque, New Mexico, before eventually spending his youth in Miami, Florida, and moving to Seattle, Washington as an adult.
Receiving degrees in Electrical Engineering and Computer Sciences from Princeton, Bezos spent the earliest days of his career filling multiple positions within Wallstreet’s business sector. This eventually ended in 1994 when he left his position at a hedge fund firm.
While enjoying a fairly impressive life with his Wallstreet career, Bezos had read an article detailing the 2000% growth of the internet and its predicted long-term growth. This spurred Bezos to plan out a company that could capitalize on the budding internet and create entirely new business opportunities for the young hedge fund manager.
In 1994, Bezos acted on his plan, and he created Cadabra, or what we now know as Amazon.
Jeff Bezos’s Earliest Days as an Entrepreneur
In 1994, with $10,000 of his own money, and an eventual investment of $250,000, Jeff Bezos and his wife launched Amazon.com as an online book broker. Although, they identified their company as a simple online bookstore. This caused issues for the company later on, but it would eventually become true. Originally, the site was to be called “Cadabra”, but the input of a lawyer led to Amazon being the final name of the endeavor.
The idea behind opening a book brokerage was that Amazon would be able to provide any book to any customer with just a couple of clicks. With books being low-cost investments and in high demand at the time, they were the perfect products to focus on from 1994 to 1998.
Bezos was fairly successful with this plan, as you’ve probably figured out from the rest of this article, and he eventually added CD and DVD products to the line-up in 1998, with clothing and third-party sellers coming to the site by 2002.
This was just the beginning of Bezos’s initial plan, though. From the beginning, he made it known that Amazon would be tech leader, and it would shake up the way society made purchases for the better.
A Constant Push Towards the Front of the Pack
While Amazon.com succeeded in every retail industry it took part in, it didn’t start to truly separate itself from other online retailers until it finally started to embrace Jeff’s push to jump to the head of the tech industry. While Bezos made multiple failed attempts to enter the world of publishing and streamline the purchasing process before 2005, Amazon didn’t become a major figure in the tech arena until its release of the Kindle tablet.
The 2005 release of the Kindle tablet marked Amazon’s first attempt to enter the tech field, and Bezos helmed the project personally to ensure it was taken in the right direction. At first, it was mildly successful, but now it’s considered to be one of the best e-reader models on the market.
The Kindle wasn’t the company’s only tech venture, though. Amazon Echo was also released with praise from critics and a massive user base, and the company continues to push itself further into the tech field. At the moment, the company is spearheading the development of the first unmanned grocery stores, and it even has its own stakes in space programs, drone technology, and driverless vehicles. All of these advancements have come during Bezos’s time as CEO.
Jeff Bezos and Elon Musk
From 2017 to the present, Jeff Bezos has maintained an ongoing professional rivalry with Elon Musk; a business model of similar origins who has also reached the peak of financial success. Unlike Bezos, Musk typically deals in vehicular and “green” tech, as well as his own space program.
The financial race Bezos and Musk find themselves in is often admired by the masses, but one aspect of their tech race helps distinguish Bezos’s own resolve as an innovative mind. While Musk has built a career around space-age tech and currently competes for the position of the richest man on Earth due to it, Bezos started out with a bookstore. Despite being outclassed by Musk’s SpaceX program and superior experience in the field, Jeff Bezos’s ingenuity allowed him to race neck-to-neck with the young business genius for a fairly long period of time.
The rivalry between Bezos and Musk is ongoing, and each new technological or financial race results in back-and-forth insults, jabs, and business maneuvers, but regardless of who wins the competition, humanity typically gains a lot in the process.
Jeff’s Future with Amazon
As of the time of this writing, May 2021, Jeff Bezos is currently divorcing his wife and preparing to step down as the CEO of Amazon. At 57-years old, he’s far from retiring, though.
Bezos currently intends to take a less demanding position as an Amazon chairman, while focusing heavily on the upcoming tech endeavors of the company. As a result, the current director of cloud computing will take his place as the head of the company. With Bezos’s replacement having a long and positive track record with the company, the transition isn’t expected to have a major impact on stock prices.
Learn from One of the Best
The story of Jeff Bezos isn’t free of controversy, but it is one of successful business maneuvers and fights against impossible odds to reach the peak of humanity’s modern performance. There’s a lot to learn from his mindset, his quick but well-thought-out action, and his drive to constantly improve.