BUSINESS STRATEGY

What are the key differences between Amazon and Alibaba? [Part 2 of 2]

Amazon and Alibaba truly are two disruptive and innovative companies. Check out the characteristics of each tech giant

Disclaimer: please note this article is a collection of personal thoughts and a few quotes from experts. All info is publicly available. The content hereby written does not reflect in any way the position of the company I work for.

Dear reader,

With this article (this is the second part, the first can be found here) about the differences between Amazon and Alibaba, I highlight the key characteristics of each one. Knowing more how they play and operate could help you build a better business plan. I hope you enjoy the reading.

Differences

Amazon

• If we had to describe Amazon in just a couple of words, in short, we would say that Amazon is a massive retailer for both new and used goods. Here an interesting angle from Investopedia, describing its most famous business models: “[...] First and foremost, the company sells goods directly. A percentage of products are offered to buyers through Amazon’s online storefront with a small markup, and inventory is kept in the company’s large network of warehouses. Most consumers visit the company’s site assuming its products are less expensive and readily available for purchase and shipping. In addition to direct sales, Amazon provides a platform for other retailers to sell products to buyers. Products sold through Amazon’s partner retailers are often less common items or those with a higher purchase price, allowing Amazon to avoid holding slow-moving inventory that could dilute profit. While Amazon does not assess a fee for its retailer partners to list items for sale, the company does retain a portion of the sales price as commission. Amazon also maintains a subscription-based business model through its Amazon Prime service as well as a small electronics product line. Under a Prime account, customers pay an annual fee to secure free two-day or same-day shipping on eligible items and have access to streaming media, such as digital music or movies. Amazon also generates revenue from…