The Amazon Flywheel, also called the Virtuous Cycle, is a business strategy pioneered by Amazon founder Jeff Bezos that uses interconnected elements to drive growth through delivering excellent customer experience.
The Flywheel operates as a cycle that propels Amazon's growth by starting with providing a great customer experience on their website. Happy customers drive more traffic and sales, making Amazon more attractive for sellers. More sellers increases product selection, lowers prices, and improves logistics. This further delights customers, repeating the cycle.
The main components of the Flywheel are low prices, vast product selection, fast shipping, outstanding customer service, customer obsession, and positive reviews. Together they create a feedback loop that retains loyal buyers.
Key takeaways for sellers are to focus on high-quality and unique products, deliver exceptional service and experience, drive traffic through marketing, and understand how improving one area can boost other parts of your Amazon presence.
Tips include optimizing listings, avoiding questionable techniques, building brand identity, and maintaining high seller rating by providing good customer service and communication.
The Flywheel strategy is crucial for Amazon because it enables continuous acceleration of growth. By constantly improving for customers, Amazon keeps the cycle spinning virtuously to drive more usage, sales, and revenue.
Pros: Scalability, cost-effectiveness, security, durability and reliability. Cons: Limited performance and flexibility in some use cases.
