With the ever present growth of internet usage, consumers are depending more and more on e-commerce. E-commerce has been a growing exchange method which is defined as “online transactions: selling goods and services on the internet, either in one transaction or over time with an ongoing subscription price” (Strauss and Frost 33). People no longer have to physically search through brick-and-mortar stores but can virtually window shop, add items to their online shopping cart, pay for their products electronically, and get their merchandise shipped directly to their homes. This idea of solely having presence on the internet is the concept of a pure play e-business model. Dominantly at the top of Strauss and Frost’s level of commitment pyramid, pure play models are defined as “businesses that began on the internet, even if they subsequently added a brick-and-mortar presence” (34). Diverse companies such as E*TRADE, eBay, Netflix, and Zappos all have substantial presence on the internet.

Created in July 1995 as an online bookstore, Amazon’s e-commerce model was open for business, demonstrating a perfect example of a successful pure play business. The company “offers the ‘Earth’s Biggest Selection’ of goods. Operating both North American and international segments, Amazon sells millions of unique products sold by the company itself and by third parties across dozens of product categories” (Amazon.com Inc. 2009).

This web business model mirrors that of a merchant more specifically a virtual merchant. You can explore the range of products from books and electronics to jewelry and exercise equipment. After selecting a product category, you can then continue your search. After clicking on a product, you can view the retail price, Amazon’s price, and how much you’d be saving. On top of price, you are able to see other views, other colors, product descriptions, special promotions, as well as a list of similar products. All of these amenities are offered right on the same page. This idea of a virtual merchant makes the shopping experience less stressful and a lot more efficient.

Companies such as Amazon can use performance metrics to gauge the success of the company. Performance metrics are “specific measures designed to evaluate the effectiveness and efficiency of an organization’s operations” (Strauss and Frost 2009). Many of these metrics are only beneficial if they are actionable. Using past metrics as benchmarks, companies can then set goals for the future. A few performance metrics that Amazon could use to evaluate their success are through sales, net income, gaining trust in consumers, and through web analytics.

Although Amazon hadn’t made a profit until 2001, just six years later in 2007 the business reported $14.8 billion in sales and $476 million in net income. According to Morgan and Stanley, in 2005 e-retailer Amazon had the highest number of sales amid all other online retailers. To remain profitable, it would make sense for Amazon to aim for even higher sales essentially boosting their profits and overall net income in the coming years.

Another way Amazon can ensure positive performance is through maintaining their customers. One way Amazon can do this is through providing the best possible and most trusted services as a pure play business. If the consumers enjoy the buying process, many of them have the potential in becoming repeat customers. Suzanne Bearne discusses a study conducted by PriceRunner, a price comparison website which evaluated seven different online brands. The findings show that “pure play retailer Amazon ranked the most trustworthy brand with 62%” (2008). Gaining consumers trust is a huge task in succeeding and remaining profitable on the internet.

Web analytics are one of the most important performance metrics. Web analytics is “the study of user behavior on web pages. Companies collect data as users click through pag4es and use it to optimize their online investments” (Strauss and Frost 2009). According to Compete.com an analytics website, Amazon had a minimum of 615 million visitors annually, a number that nearly doubled Wal-Mart’s. There’s a simple way to view this concept, the more customers that come to the Amazon homepage the greater the chance that people will buy the products. If Amazon can continually put up unbeatable numbers, the company should remain profitable.

Many pure play businesses face challenges when establishing themselves on the internet. These new brands have to compete with the already established ones (both online and brick-and-mortar), and ultimately take away their customers. Amazon had no problem making proper adjustments. Brian McBride, managing director of Amazon UK, shows confidence when asked about emerging competitors and rarely feels threatened. “‘The more the merrier’ he argues. ‘There are very few pure e-tail sites that can compete across the board like us and we still think we are in a very different, if not unique, space’” (The King of the Jungle 2008). One advantage of having a pure play business is essentially the option to change prices instantly, at any moment. Amazon is able to monitor and tailor its prices for any item to ensure that each customer is getting the best deal possible.

Eventually, many pure plays team up with brick-and-mortar stores to obtain ultimate power. Brick-and-mortar businesses offer physical presence with more trusted brands whereas pure play companies offer the online shopping experience (Davis and Schwartz 2001). Partnering together seems like a positive step in the right direction. Amazon teamed up with stores such as Target, Sears, Bebe, and Timex and now runs their retail websites. Establishing a multichannel method between brick-and-mortar and pure play businesses, both sides can successfully benefit from one and other. Analysts say that “‘as many as 70 percent of people who check out a product on a Web site go into a store to buy it’” (Davis and Schwartz 2001). Each company can learn from the other effectively establishing a relationship both online and in person. Two concepts that American strongly believe in are having options and obtaining them not only quickly but efficiently. Forming these partnerships prove to be a win-win for brick-and-mortar and pure play business models ultimately having the capability to learn from each other.

As a pure play, virtual merchant, Amazon has established great presence on the web. Amazon has “maintained its status as the undisputed top dog in pure play e-tailing, leading the field by so huge a margin that it would be near impossible for anyone else to close the gap” (The King of the Jungle 2008).

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