Amazon is the largest online retailer in the world and is rapidly growing, They own 41% of the worlds online sales, ahead of 2nd place whome owns roughly 3%.
The implementation of allowing bitcoin as a method of payment will fortify Amazons upward momentum through adapting to the changing environment, staying 1 step ahead of its competitors and sustain customer satisfaction. Amazon should make the strategic movement in harnessing the bitcoin craze and utilising it to potentially increase revenue streams.
Adding a new method of payment opens Amazon to an entire array of new customers, especially the relatively young enthusiastic trendsetters whom try to spend bitcoin wherever possible. By accepting bitcoins or similar digital currencies, you diversify payment options for your shoppers and potentially open yourself up to new revenue streams..thus gaining a competitive advantage. Despite globalisation, moving money around the world is still surprisingly difficult. It is expensive and depending on the payment, may take between 2 and 7 days. The bitcoin payment method is an extremely effective capability in that it dodges transaction fees (insert pic of paypal fees) and transferred anywhere around the world instantly. Paying someone from the US to someone in China is no different to local transfers. It is a capability that offers the consumer complete control and anonymity when purchasing from Amazons online retail sites. This dynamic capability will increase the fluidity and flexibility of amazon’s entire payment and receival process allowing for strategic enhancement include reduced prices, produce management whilst riding a global socioeconomic trend.
On January 9, 2014, Overstock.com became the first major retailer to start accepting bitcoin as payments for its goods.[34] In the first 22 hours, they received over 800 orders worth US $126,000 in bitcoin.[35][36] This represents a 4.33% increase in sales from their normal income of $3 million per day.[37] Using data such as Amazons annual profits, sales and the cost of a paypal transaction fee we can estimate the amount that AMAZON could pssobilibly be saving. Futhermore if amazon followed a similar increase that it competitor OVERSTOCK saw, the total savings of amazon could reach 4.1billion
For the bitcoin payment method to be an effective strategic and dynamic capability it will need to supply training not only to employees but to customers, a larger number of employees, support systems set up, supplies such as bitcoin wallet storages, faster computer systems and an improved IT database for security. It will have significant value in benefiting AMAZONs mission I n providing lower prices.
Bitcoin is currently a volatile market and can change value in a matter of hours however Amazon could get around this issue by converting their local currency at the time of the transaction between Amazon and their customers. This will avoid the risk of huge loses if the market crashes as only the past 1-2hrs of product sold will be affected. Also, it would be a dangerous move for amazon to primarily or only accept this form of payment. If the bitcoin market flies up, users will be less likely to buy products as they will be theoretically losing money. However, it is beneficial in that in if the market drops, users will buy more at these times thinking they will save money. Amazon avoids losses during theses times through instant reconversions of bitcoin back to a more stable currency. Hence having multiple methods of payments will avoid all of these issues and increase customer attention. Anonymous payments are beneficial for vendors who sell digital products. Buyers in this market have a higher sense of cyber security and usually prefer anonymous transactions
.hence with the right precuations and technical suystems put up in place, amazon could see large increases in their annual returns through simply, adding another method of payement. Biutcoin make not last forever and as many experts believe burt, however, isnatnt reconversion insure the stability of amazon despite the fluctuality of bitcoin.
