Amazon recently released its Annual Report for the past fiscal year, effectively making piles and piles of useful data and findings available to the public in one convenient package. Along with obvious growth, there were also some marked difficulties during the year that made an impact on the company’s current and future operations.
As Zingtree continues to grow, we’re always looking out for the best ways to optimize what we’re doing – often using our own decision tree toolkit. And, while our company may not be raking in billions of dollars like Amazon (yet), their key takeaways are something that any business can (and should) learn from.
Amazon Risk Factors and Obstacles in 2018
1. Channel expansion and high-growth pains.
Scaling and diversifying can present issues of complexity in a business’ operations. According to the report, “This expansion increases the complexity of our business and places a significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions.”
2. The risks of international operations.
Expanding into new international markets is an exciting step, especially when revenue trends start pointing in the right direction. However, factors such as business licensing, regulations on eCommerce, cultural barriers, currency, and access to the internet can cause hurdles and risks during growth.
3. Optimization of data & fulfillment centers.
Properly housing and protecting data is a hot topic for good reason. As more data is being collected, its storage and privacy are more important (and more threatened) than ever. According to the report, “If we do not adequately predict customer demand or otherwise optimize and operate our fulfillment network and data centers successfully, it could result in excess or insufficient fulfillment or data center capacity, or result in increased costs, impairment charges, or both, or harm our business in other ways.”
4. Seasonality and holiday strain.
Certain seasons always see more booming business than others, and it’s not just Amazon that feels it – in the United States especially, that season just so happens to be around the year-end holidays. During this time, demand is up, up, up, along with the amount of shipping, site traffic, and extra customer service and support staff that’s often needed. Planning well ahead to better forecast issues around the holidays is the best way to tackle this.
5. Rapidly evolving business model.
Growth is always a great thing, but growing too rapidly comes with its own set of challenges that even Amazon has faced recently. The need for increased and more efficient technology, maintaining and growing stock value, and improving the way customers discover and research products, are all huge factors to keep in mind during growth.
6. Government regulation.
Legislation has its hand to play in how businesses operate, and eCommerce companies like Amazon in particular need to take consideration in every facet of their organization. This includes making sure you’re following the rules when it comes to data protection (i.e. GDPR), energy consumption, taxation, and online payments – all necessary regulations to enforce.
As Zingtree continues to grow as a company and product, we’re looking forward to discovering new uses of our toolkit to streamline internal workflows, improve customer service strains, adhere to governmental regulations, enhance data collection, and optimize business processes. Interactive decision trees are an amazing, versatile tool that has allowed us to minimize growing pains while always providing customer support when it’s needed.
Take a look at our decision tree examples to see what amazing use-cases can help to improve your company during growth! Have any questions? Our team is here to help any time you need it.