The Amazon.com Market Model

April 2000
by Dr. Weldon Vlasak

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The Amazon.com Market Model is a classic example
of an Internet bookstore.

Author’s Note: This article describes the model of the Amazon.com Internet bookstore market based on the sales ratings listed on their Web site. The data that they provide is sampled, and a mathematical model is fitted to the data. This example provides an extraordinary opportunity to analyze the marketing efforts of the largest bookstore on the Internet. The model that is presented here provides some interesting insights as to the general characteristics of book sales, and the analysis leads to some surprising conclusions. The results show how advertising methods might be modified to significantly increase the total volume of sales for this new type of market.
Modeling
Modeling is a scientific method of analyzing a process. A mathematical model is constructed from measured data. The data is first plotted and analyzed, and then a mathematical equation is synthesized to match the data. The laws of physics were derived in this manner. Some models are derived from a combination of existing models and new data. It was found that the Amazon.com model is unique, not matching the general characteristics of known distributions.
A distribution is a set of data points with unique characteristics that result from the measurement of a process. For instance, the Census Bureau polls the citizens of the United States in order to determine various distributions of vital statistics. From this dat…IBPA Members – Click here to view the full article (login required).

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