How Amazon was founded

The Rise and Rise of Amazon: A Brief History of the Everything Store

How Amazon was founded

In terms of revenue, Amazon is the biggest internet-based company in the world. When it started out selling books online in 1994, Jeff Bezos had an idea that the best way to succeed online was to grow big and fast.

Today, the company sells everything from books to groceries to shipping container houses. It has become a one-stop-shop and has many ambitions for its future. 

Here we explore Amazon's earliest days and highlight some of the company's most important milestones. We will also attempt to explore why the company became so popular. 

When did Amazon start and when was Amazon founded?

Amazon, or more correctly, was first incorporated by Jeff Bezos in July of 2005. At the time, he was a Wall Street hedge fund executive.

Amazon was originally to be called Cadabra (from Abracadabra). But Bezos' lawyer advised him that the reference to magic might be a bit too obscure.  

Also, when people heard the name on the phone, they all too often heard “Cadaver” instead — not ideal. 

Source: James Duncan Davidson / Flickr

So, Bezos and his then-wife MacKenzie Tuttle started to register some domain names for their potential new venture. 

Bezos soon registered the domain names,, and He also registered the domain name and kept it. In fact, if you type that into your browser today, you'll be redirected to

After scrolling through a dictionary for some inspiration, he hit on the word Amazon. Bezos thought this was particularly fitting as he envisaged his online store becoming the biggest in the world — much the Amazon is one of the biggest rivers on the planet. 

This is the philosophy behind why Amazon is commonly called the everything store today. was registered on the 1st of November 1994. Name sorted, but what to sell?

At the time he knew he wanted to build some form of an online retailer but wasn't sure what to sell. After some research, he settled on books.

They were relatively easy to source, package, and distribute. 

Source: jetcityimage/iStock

Amazon was not the first company to hit on this business strategy. Another company, Computer Literacy (a Silicon Valley bookstore) began selling its own wares online as early as 1991.

The difference that had to offer was its greater convenience. It, from the off, was a model of delivering online orders directly to the customer's address anywhere in the world. 

As we all know now, is about a lot more than just books today. This was always the plan, according to Bezos. 

He contended from the company's very beginnings that Amazon was not just an online retailer selling consumer products. Bezos envisaged the company being a technology company at heart whose real business was to simplify online transactions for its customers. 

When did Amazon start selling things other than books?

As we have already seen, Amazon started out selling books online. This was groundbreaking for the time and very few companies were providing the level of convenience that had to offer. 

Source: QuoteCatalog/Flickr

But, when did it start selling other products?

After following Bezos' initial business plan, the company expanded into selling computer games and music in 1998. At about the same time, Amazon also expanded its services internationally by purchasing other online bookstores in the UK and Germany. 

By the turn of the Millenium, Amazon had further expanded into selling consumer electronics, video games, software, home-improvement items, toys, games, and much more.

By the mid-2000s, Amazon had launched its Amazon Web Services (AWS). This innovation fitted well with Bezos' initial ambition to make Amazon a tech company rather than an online retailer exclusively. 

By 2006, Amazon expanded its AWS portfolio with its Elastic Compute Cloud (EC2). This was followed up by their Simple Storage Service (S3) soon after. 

The company's expansion into digital services EC2 and S3 would boost the company's revenues significantly. Today, they remain the bulk of the income for Amazon Web Services.

Source: 4kodiak/iStock

2007 saw the unveiling of the first Kindle e-readers. These relatively low-cost handheld tablets would invigorate the e-book market, and by 2012 the Kindle would constitute around 50% of all Android-operated tablet sales. 

The Kindle's success led to Amazon entering the e-book publishing market in 2011 with its Amazon Publishing service. That same year Amazon announced that e-book sales on its site were outselling traditional printed books. 

Since then Amazon has continued to expand into many other services. These include shipping fresh produce, drone delivery, and many more innovations. 

Amazon has even recently begun operations at their very own airport.

At the time of its founding, many of Bezos' peers and other critics voiced their skepticism about his proposed business model. Financial journalists were some of the most vitriolic and often disparaged the company by referring to it as Amazon.bomb. 

Many of them claimed that would ultimately lose out to more established bookstores. Especially those that were already following suit and starting their own e-commerce sites. 

The very fact that didn't become profitable until the final quarter of 2001 didn't help things. But Bezos stayed firm and dismissed his naysayers as people who simply didn't understand the potential for the business. 

Bezos argued that in order to succeed as an online retailer, Amazon would need to “Get Big Fast.” And grow it did.

By December of 1996, the company's customer base had grown to an impressive 180,000. By October of the following year, this figure had leaped to around 1,000,000 registered accounts. 

Revenues had reached around $148 million in 1997, a significant jump from around $16 million in 1996. 

Source: Seattle City Council/Flickr

Up until this point, Amazon had remained a private company. But Bezos soon realized that he would need more than just private investment to sustain the company's growth.

And so, in 1997, went public and managed to raise an eye-watering $54 million on the NASDAQ exchange. In addition to the cash, the company was able to use its stock sales to fund its aggressive growth and acquisition strategy.

By 1998, Amazon's revenues had reached an impressive $600 million. 

Amazon's meteoric rise in such a short time frame catapulted Bezos into the public eye. He was also chosen to be Time magazine's 1999 Person of the Year. 

Source: Amazon

At around the same time, Amazon launched its now highly lucrative Affiliate program. 

By joining the program, other companies advertised Amazon's merchandise for sale on their own platforms. Amazon would then fulfill the order and pay a commission — win, win. 

The program proved to be a savvy business decision. It grew from one Associate in 1996 to well over 350,000 by the close of 1999. 

How does Amazon use technology to increase efficiency?

Apart from its near-universal appeal as a kind of one-stop-shop, Amazon has also taken advantage of the latest technological innovations to increase its efficiency and service to its customers. 

From the use of AI to handle and process orders or recruit to experimenting with drones and robots for order fulfillment and delivery, Amazon is certainly not afraid of testing out the latest innovation in tech. 

This approach, however, been both good and bad. 

For example, a machine-learning recruitment tool the company adopted, though apparently was not used in the final decision process, was later shown to have an apparent bias against certain groups of people for software developers and other technical positions. Once the issue was discovered, Amazon duly canceled the product.

Amazon has also adopted automated processes for firing, as well as hiring. Such systems have been criticized for making decisions without being able to take into consideration all factors — issues in someone's personal life, etc. Software solutions, Amazon's “Anytime Feedback Tool”, for example, enable staff to either praise or criticize their coworkers. 

Source: JBLM PAO/Flickr

This same software also tracks an employee's performance against set Key Performance Indicators (KPIs) whilst handling orders from customers.

While mistakes do happen and are expected, Amazon has been criticized for the pressure it appears to be putting some of its warehouse staff under — even claims that staff can be automatically fired should their performance be deemed unacceptable. 

However, it is important to note that Amazon wholeheartedly denies such practice. 

“It is absolutely not true that employees are terminated through an automatic system. We would never dismiss an employee without first ensuring that they had received our fullest support, including dedicated coaching to help them improve and additional training,” an Amazon representative told MIT Technology Review. 

Amazon has also been adopting more and more automated solutions to increase efficiency in its fulfillment centers, the use of robots to find and retrieve items. However, for the time being, at least, human workers are still a key part of Amazon's delivery service — especially when it comes to packing items and dealing with customer service.  

The main appeal of Amazon in its early days was one of pure convenience. No longer did a potential customer need to visit a physical bookstore to get the book they were looking for.

The ability to search, select and purchase a book from the comfort of your own home was an amazing innovation at the time. Not only that, but Amazon would deliver your purchase to your front door within days.

Source: Amazon News/

The very fact that they began to offer more and more different products only broadened its appeal to more and more customers. But it wasn't really about the goods they were selling. 

Amazon's success owed, many other successful companies, to the service that they offered. This gained them significant customer loyalty, and as a result, big profits in the long run. 

Another innovation Amazon made for its customers was its recommended product function. By offering other products to upsell, the customer's previous purchases, Amazon was able to increase its revenue even more.

The addition of customer reviews of products also helped to foster a kind of “customer community” that made the site, and its wares, more appealing to potential new customers. 

In recent years, Amazon has reached new heights, becoming the second-ever $1 trillion market cap company in history (Apple got there first, believe it or not). After announcing, and then canceling plans to build its second HQ in New York following political pressure, Amazon would see record growth during 2020.

Source: Amazon blog

With many people stuck at home during the pandemic, Amazon, and other online retailers enjoyed something of a field day. 

The most recent major news in Amazon's more than 25 years in business, was the announcement that Bezos has decided to step down as the company's CEO as of fall 2021. How the company will perform with Bezos not behind the wheel is yet to be seen, but if past performance is anything to go by, it is bound to be a highly successful one. 

That is, of course, unless calls to break up Amazon gain serious traction in the public eye. As they say, time will tell. 

Interesting Engineering is a participant of the Amazon Services LLC Associates Program and various other affiliate programs, and as such there might be affiliate links to the products in this article. By clicking the links and shopping at partner sites, you do not only get the materials you need but also are supporting our website.


Amazon Startup Story

How Amazon was founded

This startup story features Jeffrey P. Bezos, the innovative founder of Amazon. The company, which now generates over $61 Billion in Revenue and holds the title as the world’s largest  online retailer, was started Bezos’s garage at 30 years old.

Amazon Stats:

  • Industry: Online Retailing
  • Annual Revenue: $61.09 Billion
  • # of Employees: 97,000
  • Famous For: Being the world’s largest online retailer

How Amazon Got Started

The year was 94′ and Bezos was working diligently on Wall Street. At 30 years old, he began to see the internet revolution take place, and made the decision to quit his job and start an internet company.

“The wake up call was finding this startling statistic that web usage in the spring of 1994 was growing at 2,300 percent a year. You know, things just don’t grow that fast. It’s highly unusual, and that started me about thinking, “What kind of business plan might make sense in the context of that growth?” 

After making a list of the ‘top 20’ products that he could potentially sell on the internet, he decided on books because of their low cost and universal demand. It turns out, it was just the beginning…..

The Founder’s Start

As a child, he spent summers at his grandfather’s ranch in southern Texas, “laying pipe, vaccinating cattle and fixing windmills”.

 The 18-year-old Bezos “said he wanted to build space hotels, amusement parks and colonies for 2 million or 3 million people who would be in orbit. ‘The whole idea is to preserve the earth’ he told the newspaper ….

The goal was to be able to evacuate humans. The planet would become a park”. 

Amazon’s Funding

The initial startup capital came from his parent’s personal savings.

From an interview with Jeff Bezos, for the Academy of Achievement:

“The first initial start-up capital for came primarily from my parents, and they invested a large fraction of their life savings in what became And you know, that was a very bold and trusting thing for them to do because they didn’t know.

My dad’s first question was, “What’s the Internet?” Okay. So he wasn’t making a bet on this company or this concept. He was making a bet on his son, as was my mother.

So, I told them that I thought there was a 70 percent chance that they would lose their whole investment, which was a few hundred thousand dollars, and they did it anyway.”

Follow on Funding

Amazon raised a series A of $8M from Kleiner Perkins Caufield & Byers in 1995. In 1997, Amazon went public to raise additional capital. By 1999, the value of the Kleiner Perkins Caufield & Byers investment in Amazon created returns of over 55,000%.

Years to profitability

Within two months, Amazon’s sales were up to $20,000/week. However, the company has continued to plow their revenue back into growth. The chart below depicts Amazon’s continued focus on long-term growth, with profit remaining near $0 or below, and revenue rising.

Important Amazon Milestones:

1994: Jeff Bezos quits his job and launches Amazon his garage.
             Within 30 Days, it is doing $20,000 per week in sales.

1995: Bezos raises an $8 Million round of funding from Kleiner Perkins.

1997: Amazon goes public at $18 per share.

1999: Bezos is named Time Magazine’s “Person of the Year” for popularizing online shopping.

2009: Bezos acquires Tony Tsieh’s Zappos through a stock swap.

2013: Bezos acquires the Washington Post.

Companies Amazon Has Acquired:

Amazon has made over 44 notable company acquisitions over the years. It’s first Acquisition was in 1998.

  • 1998: PlanetAll, Junglee, (later became Amazon UK).
  • 1999: Internet Movie Database (IMDb), Alexa,, and
  • 2003: CDNow (Defunct)
  • 2004:, an e-commerce site in China.
  • 2005: BookSurge,, and
  • 2006: Shopbop, a women’s luxury retailer.
  • 2007: and Brilliance Audio.
  • 2008:,, Box Office Mojo, AbeBooks, Shelfari, and Reflexive Entertainment.
  • 2009: Zappos,  Lexcycle, SnapTell,  Stanza (Kindle Rival).
  • 2010: Touchco., Woot, Quidsi, BuyVIP, and Amie Street.
  • 2010: Toby Press
  • 2011: LoveFilm, The Book Depository, Pushbutton, and Yap
  • 2012: Kiva Systems, Teachstreet, and Evi
  • 2013: IVONA Software, GoodReads, and Liquavista

Jeff Bezos Startup Advice

“We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn’t give up.”

“If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”


Jeff Bezos

How Amazon was founded

Entrepreneur and e-commerce pioneer Jeff Bezos is the founder and CEO of the e-commerce company Amazon, owner of The Washington Post and founder of the space exploration company Blue Origin. His successful business ventures have made him one of the richest people in the world.

 Born in 1964 in New Mexico, Bezos had an early love of computers and studied computer science and electrical engineering at Princeton University. After graduation, he worked on Wall Street, and in 1990 he became the youngest senior vice president at the investment firm D.E. Shaw.

 Four years later, Bezos quit his lucrative job to open, an online bookstore that became one of the Internet's biggest success stories. In 2013, Bezos purchased The Washington Post, and in 2017 Amazon acquired Whole Foods.

 In February 2021, Amazon announced that Bezos will step down as CEO in the third quarter of the year.

Early Life and Education

Bezos was born on January 12, 1964, in Albuquerque, New Mexico, to a teenage mother, Jacklyn Gise Jorgensen, and his biological father, Ted Jorgensen. 

The Jorgensens were married less than a year. When Bezos was 4 years old, his mother remarried Mike Bezos, a Cuban immigrant.

Bezos graduated summa cum laude from Princeton University in 1986 with a degree in computer science and electrical engineering.

Bezos showed an early interest in how things work, turning his parents' garage into a laboratory and rigging electrical contraptions around his house as a child.

He moved to Miami with his family as a teenager, where he developed a love for computers and graduated valedictorian of his high school. It was during high school that he started his first business, the Dream Institute, an educational summer camp for fourth, fifth and sixth graders.

Career in Finance

After graduating from Princeton, Bezos found work at several firms on Wall Street, including Fitel, Bankers Trust and the investment firm D.E. Shaw. In 1990, Bezos became D.E. Shaw's youngest vice president. 

While his career in finance was extremely lucrative, Bezos chose to make a risky move into the nascent world of e-commerce. He quit his job in 1994, moved to Seattle and targeted the untapped potential of the Internet market by opening an online bookstore.

Bezos opened, named after the meandering South American river, on July 16, 1995, after asking 300 friends to beta test his site. In the months leading up to launch, a few employees began developing software with Bezos in his garage; they eventually expanded operations into a two-bedroom house equipped with three Sun Microstations.

The initial success of the company was meteoric. With no press promotion, sold books across the United States and in 45 foreign countries within 30 days. In two months, sales reached $20,000 a week, growing faster than Bezos and his startup team had envisioned. went public in 1997, leading many market analysts to question whether the company could hold its own when traditional retailers launched their own e-commerce sites. Two years later, the start-up not only kept up, but also outpaced competitors, becoming an e-commerce leader.

Bezos continued to diversify Amazon’s offerings with the sale of CDs and videos in 1998, and later clothes, electronics, toys and more through major retail partnerships. 

While many dot.coms of the early '90s went bust, Amazon flourished with yearly sales that jumped from $510,000 in 1995 to over $17 billion in 2011.

As part of Bezos' 2018 annual shareholder letter, the media tycoon said the company had surpassed 100 million paid subscribers for Amazon Prime. By September 2018, Amazon was valued at more than $1 trillion, the second company to ever hit that record just a few weeks after Apple. 

At the end of 2018, Amazon announced it was raising the minimum wage for its workers to $15 per hour. The company has still been criticized for its working conditions and grueling pace, with workers protesting during Prime Day in July 2019.

Amazon Instant Video & Amazon Studios

In 2006, launched its video-on-demand service. Initially known as Amazon Unbox on TiVo, it was eventually rebranded as Amazon Instant Video.

Bezos premiered several original programs with the launch of Amazon Studios in 2013. The company hit it big in 2014 with the critically-acclaimed Transparent and Mozart in the Jungle. 

The company produced and released its first original feature film, Spike Lee's Chi-Raq, In 2015.

In 2016, Bezos stepped in front of the camera for a cameo appearance playing an alien in Star Trek Beyond. A Star Trek fan since childhood, Bezos is listed as a Starfleet Official in the movie credits on IMDb.

In early 2018, The Seattle Times reported that Amazon had consolidated its consumer retail operations in order to focus on growing areas including digital entertainment and Alexa, Amazon's virtual assistant.

Kindle E-Reader

Amazon released the Kindle, a handheld digital book reader that allowed users to buy, download, read and store their book selections, in 2007.

Bezos entered Amazon into the tablet marketplace with the unveiling of the Kindle Fire in 2011. The following September, he announced the new Kindle Fire HD, the company's next-generation tablet designed to give Apple's iPad a run for its money.

“We haven't built the best tablet at a certain price. We have built the best tablet at any price,” Bezos said, according to ABC News.

Amazon Drones

In early December 2013, Bezos made headlines when he revealed a new, experimental initiative by Amazon, called “Amazon Prime Air,” using drones to provide delivery services to customers. He said these drones would be able to carry items weighing up to five pounds and be capable of traveling within a 10-mile distance of the company's distribution center.

The first Prime Air delivery took place in Cambridge, England, on December 7, 2016.

Fire Phone

Bezos oversaw one of Amazon's few major missteps when the company launched the Fire Phone in 2014. Criticized for being too gimmicky, it was discontinued the following year.

Whole Foods

Bezos had been eyeing the food delivery market, and in 2017 Amazon announced it had acquired the Whole Foods grocery chain for $13.7 billion in cash. 

The company began offering in-store deals to Amazon Prime customers and grocery delivery in as little as two hours, depending on the market. As a result, Walmart and Krogers also began offering meal delivery to its customers. 


On August 5, 2013, Bezos made headlines worldwide when he purchased The Washington Post and other publications affiliated with its parent company, The Washington Post Co., for $250 million.

The deal marked the end of the four-generation reign over The Post Co. by the Graham family, which included Donald E. Graham, the company's chairman and chief executive, and his niece, Post publisher Katharine Graham.

“The Post could have survived under the company's ownership and been profitable for the foreseeable future,” Graham stated, in an effort to explain the transaction. “But we wanted to do more than survive. I'm not saying this guarantees success, but it gives us a much greater chance of success.”

In a statement to Post employees on August 5, Bezos wrote: 

“The values of The Post do not need changing. …There will, of course, be change at The Post over the coming years. That's essential and would have happened with or without new ownership.

The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs.”

Bezos hired hundreds of reporters and editors and tripled the newspaper's technology staff (hundreds of those employees published an open letter to their boss asking for salary increases and better benefits in the summer of 2018). The organization boasted several scoops, including revealing that former national security advisor Michael Flynn lied about his contact with Russians, leading to his resignation. 

By 2016, the organization said it was profitable. The following year, the Post had an ad revenue of more than $100 million, with three straight years of double-digit revenue growth. Amazon soon bypassed The New York Times digital in unique users, with 86.4 million unique users as of June 2019, according to ComScore.

Blue Origin

In 2000, Bezos founded Blue Origin, an aerospace company that develops technologies to lower the cost of space travel to make it accessible to paying customers. For a decade and a half, the company operated quietly. 

Then, in 2016, Bezos invited reporters to visit the headquarters in Kent, Washington, just south of Seattle. He described a vision of humans not only visiting but eventually colonizing space. In 2017, Bezos promised to sell about $1 billion in Amazon stock annually to fund Blue Origin. 

Two years later, he revealed the Blue Origin moon lander and said the company was conducting test flights of its suborbital New Shepard rocket, which would take tourists into space for a few minutes.

“We are going to build a road to space. And then amazing things will happen,” Bezos said.

In August 2019, NASA announced that Blue Origin was among 13 companies selected to collaborate on 19 technology projects to reach the moon and Mars.

Blue Origin is developing a safe and precise landing system for the moon as well as engine nozzles for rockets with liquid propellant.

 The company is also working with NASA to build and launch reusable rockets from a refurbished complex just outside of NASA’s Kennedy Space Center.

Bezos Day One Fund

In 2018, Bezos launched the Bezos Day One Fund, which focuses on “funding existing non-profits that help homeless families, and creating a network of new, non-profit tier-one preschools in low-income communities.” The announcement came a year after Bezos had asked his followers how to donate part of his fortune.

Bezos founded the organization with his ex-wife MacKenzie before their divorce, and he gave away $2 billion of his personal fortune to fund the nonprofit. As one of the world's wealthiest people, Bezos had been publicly criticized in the past for his lack of philanthropic efforts. 

Healthcare Venture

On January 30, 2018, Amazon, Berkshire Hathaway and JPMorgan Chase delivered a joint press release in which they announced plans to pool their resources to form a new healthcare company for their U.S. employees.

According to the release, the company will be “free from profit-making incentives and constraints” as it tries to find ways to cut costs and boost satisfaction for patients, with an initial focus on technology solutions.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Bezos. “Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort.”

Earth Fund

On February 17, 2020, Bezos announced that he was launching the Bezos Earth Fund to combat the potentially devastating effects of climate change. Along with committing $10 billion to the initiative, Bezos said he would begin issuing grants and fund “scientists, activists, NGOs — any effort that offers a real possibility to help preserve and protect the natural world.”

Stepping Down as CEO

In February 2021, Amazon announced that Bezos will step down as CEO in the third quarter of the year. He will transition to executive chair of Amazon's board.

Wife and Kids

Bezos met MacKenzie Tuttle when they both worked at D.E. Shaw: he as a senior vice president and she as an administrative assistant to pay the bills to fund her writing career. The couple dated for three months before getting engaged and married shortly thereafter in 1993. 

MacKenzie was an integral part of the founding and success of Amazon, helping create Amazon's first business plan and serving as the company's first accountant.

Although quiet and bookish, she publicly supported Amazon and her husband.

A novelist by trade, training under Toni Morrison during her college years at Princeton University, MacKenzie published her first book, The Testing of Luther Albright, in 2005, and her second novel, Traps, in 2013.

After more than 25 years of marriage, Bezos and MacKenzie divorced in 2019. As part of the divorce settlement, Bezos' stake in Amazon was cut from 16 percent to 12 percent, putting his stake at nearly $110 billion and MacKenzie's at more than $37 billion. MacKenzie announced that she planned to give away at least half of her wealth to charity.

Bezos and MacKenzie have four children together: three sons and a daughter adopted from China.

Personal Life

Right after Bezos announced his divorce from MacKenzie in January 2019, The National Enquirer published an 11-page exposé of the media mogul's extramarital affair with television host Lauren Sanchez. 

Bezos subsequently launched an investigation into the motives of The National Enquirer and its parent company, American Media Inc. The following month, in a lengthy post on Medium, Bezos accused AMI of threatening to publish explicit photos unless he backed off the investigation. 

“Of course I don’t want personal photos published, but I also won't participate in their well-known practice of blackmail, political favors, political attacks and corruption,” Bezos wrote. “I prefer to stand up, roll this log over and see what crawls out.”

In that same post, Bezos suggested that there was possibly a link between AMI's actions and the Saudi Arabian government. Later, a forensic analysis of Bezos' phone revealed that it was hacked after the mogul received a video via WhatsApp from Saudi Arabia's Crown Prince Mohammed bin Salman.

Sanchez divorced her husband in April 2019. She and Bezos made their first public appearance as a couple that July at Wimbledon.


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