Amazon and eBay as lead for other ecommerce businesses
However, it was not until the mid-1990s that e-commerce was transformed thanks to Amazon and eBay, who took the lead for all other ecommerce businesses.
In 1995, Jeff Bezos sold his first book on Amazon.com, which was to become the biggest marketplace ever. Bezos was quite ambitious – he wanted to turn Amazon into the "largest bookstore on earth." For the first 30 days, he achieved even more than he expected – Bezos sold books online to consumers in all 50 states and in more than 40 countries. The reason behind choosing books as opposed to anything else was not accidental but rather a careful and well-thought plan of action – books were cheap to ship, easy to store, and ordered directly from the publishers. Moreover, by 95, publishers had created vast amounts of data on books they held in possession on CD-ROMs, so it was easy for Bezos to upload that information on the website.
Soon, Amazon became the standard for a customer-oriented e-commerce site. Users could search for available titles by keyword, author, or subject, browse books by category and review products, and later – receive personalized recommendations and buy books with the patented ‘one-click” check-out system.
In 1997, Amazon went public and by the time of the dot com bubble, the company had become an established business.
Soon Amazon expanded its offerings beyond books and included music, movies, electronics, toys, home and garden equipment, and so forth.
However, despite such a huge success, Amazon only became profitable in 2001. In 2008, Amazon announced a profit increase of 33 percent, an impressive achievement during the financial crisis, when most of the companies rather lost than gained.
In 1995, when Bezos was shipping books from his garage, another self-made entrepreneur slash software engineer, Pierre Omidyar, was coding a simple website AuctionWeb, where he tested a hypothesis of users selling and bidding on each others’ items. As a first bid, Omidyar uploaded a picture of his broken laser pointer, which was sold the next day for $14.83. When Omidyar reached out for the buyer to ensure he knew that the laser was broken, the buyer replied that he was, in fact, a “collector of broken laser pointers.” AuctionWeb was the prototype of eBay, the website that changed the marketplace and democratized e-commerce: users didn’t have to be an entrepreneur to sell their stuff online. With only two employees, eBay sold products worth $7.2 million in 1996. By 2007, eBay sold $53 billion worth of goods, had more than 220 million users and more than 13,000 employees.