Amazon Inc.’s Transaction Processes and Risk Management

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Amazon is a global online retailer consisting of around 150.6 million mobile users accessing its online E-commerce website to purchase products (Warrier et al. 7). The company sells every aspect of consumer wants from A to Z, including cloud computing services, website development, and data storage leases. Initially, in 1994, the company used to sell books, which later started expanding into selling PC games and music in 1998 (Warrier et al. 7). Continuous advancement in the company’s web services made Amazon not only an online retailer but a tech organization. In 2006, the company expanded its web services portfolio with cloud computing services (Warrier et al. 7). The company analyzes different cultures in various countries to identify consumer behavior and perception, providing comprehension of consumer mindset. Therefore, the company uses the collected or researched information to determine the contributing factors influencing consumer purchasing power.

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Amazon’s Personal Data Protection Strategies

Amazon’s transaction process system is the most prominent part that differentiates it from other online retailers. The system customers’ data from external attacks and allows them to purchase products efficiently. Amazon uses Secured Socket Layer (SSL) encryption method responsible for transmitting encrypted customer order information or credit card data to its servers (Ivanov 9). The system’s particular functionalities suggest customers with products based on previous searches, a data mining technique. These functionalities make the website more interactive and improve customer satisfaction.

Major Transaction Processes of Amazon Company

Amazon’s major transaction processes include order placement, contacting Manufactures, order acknowledgment, product Shipping, and product delivery. Order placement is performed by the customer who wants to buy a particular product from the company’s e-commerce website. The supply chain management system is linked to the Amazon pay payment system and the web service that processes customer product information (Ivanov 12). The information collected from the company website is directed to another approach based on the Oracle database management that provides accurate feedback concerning order tracking and shipping. A customer relationship management system is critical for the delivery shipment system providing encryption to order data and credit card information.

Shipping Transactional Process

When a customer orders for product, Amazon emails the seller shortly after it is picked. Sometimes the email process can take up to 20 minutes depending on the customer’s information, payment methods, and the amount. Amazon avails complete order information to the seller, including the number of products sold, prices, and the fee charged on the purchase by the company (Muhammad et al. 1235). A seller has to ship the purchased products to the customer, print the packing slip, and confirm the succession of product shipping. Amazon provides the order page where all the details about the products purchased are available for reference in case of a misunderstanding.

The seller needs to print the order packing slip containing all shipping information for the product, tear the top part, and attach it to the package. Alternatively, the seller can use Amazon shipping services by clicking the Buy shipping button, specifying the package weight and size, and choosing the best method preferable. However, Amazon FBA orders provide sellers with easy shipping work (Muhammad et al. 1235). In this case, the company is responsible for all shipping processes. The seller is notified through email that the product is shipped, and transaction specifications can be found on the order page. The service has other advantages. For instance, a seller can request Amazon FBA shipment services to ship a product from its warehouse through other online retail companies’ customers, including eBay. The seller visits Seller Central by clicking manage inventory, choosing the product sold, and specifying the destination and email address of the customer from the Create Fulfillment Order (Muhammad et al. 12237). Shipment charges change per shipment method and depend on the amount the seller or buyer wants to spend. Lastly, the seller reviews the shipment details and selects “Place Order” to complete the transaction process.

Essential Controls to Mitigate Risks

Amazon keeps its information systems up to date, fostering scalability, security, and effectiveness to improve communication between customers and sellers. The company ensures a limitless inventory to avoid scarcity of products. However, during the pandemic period, the company experienced a sheer demand that led to price gouging (Tripathi 252). US Public Interest Research Group found Amazon 50% price higher on sanitizers and masks immediately after the World Health Organization declared Covid-19 a global pandemic (Tripathi 252). As a result, Amazon eliminated more than half a million “high-priced offers” from its E-commerce website for heretical price gouging compliance. Amazon increased its high-demand product stock to maintain its customers and retain trust with shoppers.

Conclusion and Recommendations

Internal control focuses on the risk assessment that addresses business risks that may pose or threaten the growth strategy objectives of the company’s financial reporting and compliance. Internal controls assure Amazon that things happen as planned and any hazard can be mitigated effectively using set strategies. Amazon should implement strong deter price coughing regulations and establish effective strategies to combat such incidents during emergencies. Despite this, the company should provide a violation section or page where customers report potential violations experienced by seller customer services. Lastly, amazon should maintain a constant communication flow with suppliers or sellers to anticipate the most demanded products and ensure availability.

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Works Cited

Ivanov, Dmitry. “Supply chain viability and the COVID-19 pandemic: A conceptual and formal generalization of four major adaptation strategies.” International Journal of Production Research (2021): 1-18.

Muhammad, Marjan, Muhd Rosydi Muhammad, and Khalil Mohammed Khalil. “Towards Shari’ah-compliant e-commerce transactions: A review of Amazon. com.” Middle-East Journal of Scientific Research 15.9 (2013): 1229-1236.

Tripathi, Salil. “Companies, COVID-19 and respect for human rights.” Business and Human Rights Journal 5.2 (2020): 252-260.

Warrier, Uma, et al. “Factors that Lead Amazon. com to A Successful Online Shopping Platform.” International Journal of Tourism and hospitality in the Asia Pacific (IJTHAP) 4.1 (2021): 7-17.

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BusinessEssay. 2022. "Amazon Inc.'s Transaction Processes and Risk Management." July 27, 2022. https://business-essay.com/amazon-inc-s-transaction-processes-and-risk-management/.

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BusinessEssay. "Amazon Inc.'s Transaction Processes and Risk Management." July 27, 2022. https://business-essay.com/amazon-inc-s-transaction-processes-and-risk-management/.