Amazon Value Proposition

Amazon Value Proposition In A Nutshell

A company like Amazon has multiple value propositions, as it serves several target customers in different markets. With its mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online and endeavors to offer its customers the lowest possible prices,” Amazon value propositions range from “Easy to read on the go” for a device like Kindle, to “Sell better, sell more” to its marketplace.

Let’s break them down!

Background story

As the author of The Value Mix I’ve designed and gathered a range of innovative tools that product managers and entrepreneurs can use to create new products and services. In this article, I’m analyzing some value propositions of Amazon. Value proposition design is a key element for a company’s success to deliver products that people want.

Many people see Amazon‘s value proposition as being the “everything store.”

But as a company, Amazon has more to offer.

Let’s dig into some of the main value propositions of the company.

(For more about value proposition design, read Hacking Value Proposition Design.)

A suite of value propositions

Amazon started as an online book store.

But over the years, through acquisitions and internal developments, the company now offers a suite of value propositions to sometimes very distinct types of customers.

There’s a lot to learn for product managers and entrepreneurs.

Digging into Amazon’s business model and value proposition can help you understand the nuts and bolts of running an e-commerce business.

One big takeaway is how Amazon focuses on increasing its customer share. Of course, Amazon has a significant market share. But matters even more to them is to delight its customers so much that they mostly use Amazon’s products and services.

This truly fits with Amazon’s mission statementto be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online and endeavors to offer its customers the lowest possible prices.”

Kindle: Easy to read on the go

The Kindle doesn’t appeal to everyone.

You often hear people saying:

  • “I can’t read on a screen.”
  • “I prefer the feel of holding a physical book.”
  • “I love the smell of a new book.”

These people aren’t Kindle users.

That’s okay. Amazon knows that they target a particular audience.

These people have a few things in common. They love reading–often more than one book at a time. They’re often on the go (commuting or traveling). So they want to travel light.

And here, the Kindle offers a great customer experience. It has a great choice of books that you can download from anywhere. You can store more books that you could read in a year in a device that is lighter than most paperback books.

The Kindle is the dream tool for any hardcore reader.

Prime: Anything you want, quickly delivered

Prime represents the quintessential value proposition of online convenience.

It serves an audience of people who tend to be in a hurry. If they need something, they cannot be bothered going to a shop and don’t want to wait more than a day before it gets delivered.

The free one-day delivery is at the core of the customer experience. But I think people also like how privileged they feel. It’s not for everyone.. and this sense of exclusivity is also comforting.

On top of that, Amazon bundles free fast delivery with many add-ons such as Amazon Video and Kindle Unlimited. This is a great deal and reassures those who feel concerned about subscribing to Prime. It’s not just a discount a delivery but a real membership with many benefits included.

It gives them a great sense of value.

Related: Amazon Prime Video Revenue Model Explained

Marketplace: Sell better, sell more

With Marketplace, Amazon targets business owners who are eager to reach larger audiences.

Their challenge is to drive enough traffic to a website and convert this traffic into sales. Amazon Marketplace gives them the tools to sell more.

For example, Amazon offers tools such as Reviews and Questions to help entrepreneurs convert viewers into customers.  

These business owners believe that it’s easier to sell through an existing marketplace than building an e-commerce shop. They enjoy the ability to leverage Amazon’s captive audience as well as being able to reach them through ads.

Related: Platform Business Models In A Nutshell

More of Amazon’s value propositions

It’s difficult to make an exhaustive list of Amazon’s value proposition as the company targets a variety of audiences with a lot of different products.

These range from Amazon self-publishing to Amazon Fresh to Amazon Music.

You can also follow Guerric, on his blog.

Recommended reading:

Read next: 

Hacking Value Proposition Design With The Value Mix [Interview]

Related:

Other resources: 

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Guerric de Ternay

Guerric de Ternay is an Inventor at ?What If! where he helps Fortune 500 companies invent and incubate new businesses and design innovative products/services. As a founder at GoudronBlanc, a brand that men love for its elegant T-shirts, Guerric designs elegant T-shirts for men who wear these as their everyday outfit. He also co-founded GO Blackwood Ltd. As an executive member of The International Alumni Council (IAC) is an advisory board of London Business School he seeks to develop, enhance, and support relationships between alumni, students, faculty and the School.

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