Hey guys,
I am back with my new blog. This blog mainly contains a brief
description about Amazon and its
business. It then talks about what could be some metrics that will be useful
for the CEO to track the progress of the business and how dimensional models
can be used for this purpose.
Introduction
Amazon.com, Inc. or simply Amazon is an e-commerce and cloud
computing company in the United States headquartered at Seattle, Washington. Amazon
is the largest online retailer in the United States. Found in 1994 by Jeff
Bezos, it started out as an online bookstore and later on branched out into
DVDs, CDs, software, apparel, furniture, etc. It has also grown its business
beyond USA and maintains separate retail websites in many countries in Europe
and Asia.
Metrics
Amazon’s business has been growing and to maintain its top
spot in the online retail world, it will help CEO Jeff Bezos to have some
metrics to analyze the performance of the company. Following are some of the
metrics:
1.
Total quantity of items sold in a given time
period: This metric will give an idea about the sales side of the business. It
does not tell anything about the revenue earned from the items and hence, the
items could be anything like cheap, expensive, large or small items.
2.
Revenue earned from selling these items: The
revenue metric can be used to gauge the economic factor of the business.
3.
Profit: This metric can give us an idea about
the actual money Amazon is making. By analyzing this metric, we can determine
how much to spend based on the amount of returns we are getting.
4.
Number of items returned: This is an important
metric for Amazon’s business model since it will help determine the percentage
of faulty items in the warehouse. If this number is more, it means the
suppliers are sending defective products and they need to be communicated to
rectify the problem.
5.
Revenue earned per customer: Customers are
important for Amazon and to know what revenue each individual customer is
generating can be of great importance. By finding patterns among the high
revenue generating customers, Amazon can make special offers for them.
6.
Revenue earned per item category: The category
information can be useful to judge what categories are selling more and what
are selling less. This way we can focus our attention to a particular category
during Sale seasons.
7.
Items sold together: We can also analyze to see
which items are often purchased together and add them in suggested list of
items or create special offers on these items.
Dimensional Model
The metrics can be best tracked with the help of a
dimensional model. With the help of a well-defined grain, these metrics can be
accurately monitored. Dimensional models can help to bring together the
required data from different sources and generate a single and consistent view
for the user. Dimensional modeling can reveal certain inconsistencies and also
help in fixing them. Whenever there are ad hoc queries, a dimensional model can
help execute them to solve business problems faster and better. Dimensional
models can also help increase the flexibility and scalability.
For Amazon’s business, Periodic and Transaction snapshot
both can be equally appropriate. I would, however, go for the Periodic snapshot
as it will give us an idea about all the metrics discussed above from time to
time on a daily, weekly, monthly or yearly basis. A transaction snapshot can
give us information about each transaction but we can analyze those with our
metrics. From the point of view of future growth, the Periodic snapshot suits
best the needs of the organization.
A sample dimensional model can be as follows:
In conclusion, dimensional modeling can be of great help to Amazon’s CEO Jeff Bezos to help determine important factors for company’s growth and make key business decisions.
References:
