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How Amazon came to be: a Prime Day history special

Updated: Aug 04, 2021, 9:34 AM

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How Amazon came to be: a Prime Day special

Have you ever wondered how Amazon became the phenomenon it is today, a household name across the globe?

Since its founding in 1994, Amazon has become the world's biggest eCommerce platform, widely known and used by countries everywhere. Hardly a soul can claim they’ve never heard the name of its founder, either: Jeff Bezos. Love it or hate it, Amazon has become the home of millions of large and small businesses and is here to stay.

With Amazon Prime Day coming up full speed ahead, we thought it was the perfect time to catch up on a bit of history on the company and how it all started. So sit back, put your feet up and get comfy, because we're about to take you on an exciting journey from the company's' humble beginnings to what is now an unstoppable force, be that for good or for evil.

The Early Life of Jeff Bezos

Jeff Bezos himself came from a family of little means in Albuquerque, New Mexico. His mother was only seventeen and in high school when he was born, and his adoptive father didn't speak English when he immigrated from Cuba. Bezos had to support himself for much of his young high-school life, working as a line cook at a local McDonald's.

Despite all, he graduated as class valedictorian with the announcement that he wanted to save Earth from becoming overused through resource depletion—a goal he is still dead set on today, forging great plans for space colonization and orbiting amusement parks through his company Blue Origin.

One day I'm going to be the first one to have an amusement park on the moon. —Bezos (on Wired.com)

Bezos graduated from Princeton with degrees in electrical engineering and computer science before chasing any of his sky-high (or space-high) dreams. He worked a variety of jobs in the financial sector, saving up for his ultimate first dream: to create his own company. Although he came from a poor family, he never saw money as an end goal, but rather as a tool for his bigger mission of changing the world.

In 1994, Bezos quit a job in an international investment firm to follow his dream

At age 30, Bezos quit a high-tier job as a hedge-fund manager and embarked on a mission to convince investors to visualize his dream, and help him with the funding it needed to become reality.

Bezos presented his business plan to countless investors, friends and family members, peddling his idea for a new e-commerce company that would blend shopping and the internet in a way the world had never seen before.

Bezos had already invested $10,000 from his own pocket into his dream, and he managed to convince a group of people to invest $50,000 in exchange for 1% of his company. However, 38 members of his family and friends remained skeptical, and ended up missing out on what would have been the deal of their lifetime—a subject many of them are still too sore to talk about, according to Bezos.

Why "Amazon"? The Story Behind the Name

At the time, his plan was a huge online bookstore that would sell millions of titles. Bezos knew he wanted to name his company something that started with "A," "B," or "C," as website listings at the time were organized in alphabetical order. He ended up registering website domain names Awake.com, Browse.com, and Bookmall.com.

For a while, Bezos was set on naming his new company "Cadabra," after the magical word "abracadabra." Thankfully, his lawyer Todd Tarbert talked him out of it—the name sounded way too much like the sinister-sounding word "cadaver," and could easily be mistaken for it in rapid phone conversations.

Jeff also highly favored the name "Relentless.com," as it embodied his lifelong struggle to get to that point—but even that name didn't end up sticking. (Today, if you type in the URL Relentless.com, it will redirect you to Amazon.com.)

Dead set on finding the perfect name for his online bookstore, Jeff Bezos finally opened the dictionary and began to go through the "A" section, word by word. When he came to the word "Amazon," he knew he had found it: the name of the largest river in the world was the perfect fit for what would become the world's biggest bookstore, he thought.

"This is not only the largest river in the world, it's many times larger than the next biggest river. It blows all other rivers away." —Jeff Bezos to Brad Stone, autobiographer.

Once he had decided on "Amazon" as his new company's official name, nobody else had a say on the matter. At the time, the whole company was still run from Bezos's garage, and he walked in there, and simply announced his decision—much like the story of how Steve Jobs' "Apple" got its name.

The domain name "Amazon" was officially registered on November 1, 1994. Bezos had installed a bell in the garage "office," programming it to ring every time an order came through. The first six months, he only got one order—which was from Bulgaria!

Soon after that, though, orders shot through the roof and the bell had to be taken down as it was driving everyone crazy. The new startup could barely keep up with the sudden demand for book deliveries.

The Amazon website in 1995

The History Behind the Logo

The first official logo Bezos drew up for his company represented a drawing of the Amazon River contained within a giant letter "A," with the website domain name in black underneath. Bezos was obsessed with the parallel drawn between his company and this impressive river, whose very name means "massive" and tends to inspire awe.

That didn't stick around for long, however. After a few short years, the river drawing had disappeared, giving way to a more simplistic text-only logo. Beneath the Amazon.com domain name, the words "Earth's Biggest Bookstore" emerged.

However, that name remained for less than a year. Bezos already knew he wanted his platform to offer more than books, and was already growing his business to sell music and videos. The logo changed a couple of times in 1998, and for a brief while, it sported the words "Books, Music & More" above the name "Amazon."

However, business was expanding way too quickly to stick to one or two defined categories, and before long, that was done away with. By 2000, the logo had evolved into the very same symbol we know and love today.

The 2000's Crisis

It wasn't all sunshine and roses for the growing e-commerce company. Although Amazon was extremely successful in its early years, it could not escape the financial crisis of the 2000's recession. Well-established companies were crashing down left and right, and Bezos's 6-year-old brainchild also hit rock-bottom and nearly had to declare for bankruptcy.

However, Amazon had amassed nearly $2 billion from investors and banks merely weeks earlier, and managed to ride out and survive the dot com stock market bubble crash which killed hundreds other less fortunate companies.

Since then, Amazon's stocks have only been growing steadily. Now in 2021, Amazon holds the title of #1 e-commerce website worldwide, and boasts a market valued at over 1.76 trillion.

The Birth of Amazon Prime

Most of us are well familiar with Amazon Prime as a subscription service offering plenty of Prime benefits along with free 2-day shipping. Yet Amazon Prime wasn't always around, and it took a while to gather the hype it has today.

In fact, Bezos first announced Amazon Prime in February, 2005, as a monthly subscription offering two-day free shipping. For quite a few years, that's all it was about—free shipping. (And great marketing on Bezos's part, as you're still buying the "free" service, although very cheaply.) Prime Day wasn't even a thing back then.

In 2011, the company randomly announced it would include video streaming as a bonus service you could get if you paid for Prime "free shipping." Although an odd decision at the time, this addition boosted subscriptions even further.

As time went by, the hodgepodge grew to include the other services we know and love, such as music streaming, photo cloud storage, and many other Prime benefits you may not have known about.

Nobody has ever known exactly how many members Prime has worldwide, or in the United States—nor how much revenue the subscription generates. It seems like Amazon has always guarded that information closely. Yet, you may think, there is no way the $12.99 monthly Prime fee covers all your Amazon shipping costs, if you are like most American buyers.

Yet, like everything else with Amazon, there is a strategy behind this. Although Bezos has announced spending billions on Prime shipping alone in the past, analysts have estimated that the average Prime customer spends three times as much as a non-Prime Amazon customer—thus making it a worthy investment for the company.

The First Prime Day... and Beyond

In 2015, Bezos decided it was time to celebrate. That year marked exactly 20 successful years since Amazon entered the market, and Prime had already been a big thing for exactly half of those years.

On July 15, 2015, the first Prime Day celebration ever went live in 9 countries, offering more deals on the Amazon platform than Black Friday had ever done in history. These countries were the U.S., Canada, France, the UK, Austria, Germany, Italy, Spain, and Japan.

Over the next 24 hours—the course of the discounts' duration—sales on Amazon hit 300% of normal sales volume across the globe. On that day, hundreds of thousands of Amazon's own devices made their way into people's homes, popularizing Amazon's Alexa and furthering the company's reach.

It was big—and Amazon knew it. After those 24 hours were over, Prime Day was set to become American tradition.

Since then, it has grown exponentially year to year, and we expect 2021 to be no exception.

And the Amazon Saga Continues...

Jeff Bezos announced this year that he is stepping down as CEO from Amazon, after nearly 30 years of operating the world's biggest e-commerce platform. He has been replaced by Andy Jassy, who was CEO of Amazon Web Services (Amazon's cloud platform).

The company has certainly gone through its ups and downs and even serious scandals over the years, lately particularly in terms of employee treatment in Amazon warehouses.

Yet at the same time, Bezos's Amazon has helped millions of other startups create their own thriving online business all around the world. Over 27 years, the platform has expanded from selling books to offering nearly every imaginable item, large or small, worldwide. At this point, if something isn't sold on Amazon—does it even exist?

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