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Amazon: E-Tail or Fairy Tale?

Explore the collaborative partnership between Amazon.com and Toys 'R' Us, their challenges and successes in the e-commerce market, and the benefits of their clicks-and-bricks strategy.

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Amazon: E-Tail or Fairy Tale?

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  1. Amazon.com:E-Tail or Fairy Tale?

  2. Amazon.com:News update • 09/19: Yahoo replaces Amazon with BarnesandNoble.com • 09/29: Price sensitivity test causes confusion for customers • 10/03: NSM (Microsoft) customers can now link and order on Amazon.com • 10/10: single website for Sotheby and Amazon • 10/31: Japanese website • 11/14: new store for e-books • 11/28: new wireless phone store • 12/00: Amazon starts selling DIRECT_TV • 01/01: net sales $960 M for 2000, $670 M for 1999 loss $0.23 for 2000, $0.96 for 1999 per share

  3. Amazon.com:Does the M&A investment pay?

  4. Dot-com misery At least 210 Dot-com companies closed or filed for bankruptcy in 2000 Company Date Pets.com 11/07/2000 Living.com 08/15/2000 Data: The Standard.com; Webmergers.com

  5. Dot-com layoffs Layoffs hit 40,660 during 1999-2001 Data: The Standard.com

  6. Can they make it?The game of cash flow Data: Business Week, Oct. 23, 2000, p EB 34

  7. Amazon:stock performance Source:

  8. Tasks: Handles shipping and customer service, sends the customers to a joint store on Amazon’s web site. Biggest challenges: Ensures seamless fulfillment with Toysrus.com’s Coordinates placement of product in distribution centers Amazon & Toys ‘R’ Us:The venture ofclicks-and-bricks Amazon.com Toysrus.com • Tasks: • Picks the toys and uses its buying power of its brick stores • Handles the placement of product on the site • Biggest challenges: • Balance the supply to its brick stores and the web site • Get people to buy multiple product Ref: Business Week, Oct 23, 2000, pEB 44

  9. Eliminate inventory management risk Gain three revenue streams: revenue share on product sold up-front fee payments for S & H Offloads burden for online infrastructure, distribution & customer service Quicker profitability 2 years ahead of plan Amazon & Toys ‘R’ Us:The payoff of clicks-and-bricks Amazon.com Toysrus.com Ref: Business Week, Oct 23, 2000, pEB 44

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