Question
Amazon's Prime service contributes to its growth by acting as a cog in its flywheel model. Prime offers lower prices, which attracts more traffic. This increased traffic attracts more merchants to sell on the site, which in turn increases the product selection. The improved product selection enhances the customer experience, allowing Amazon to grow and maintain a lower cost structure. This cycle keeps the wheel turning, contributing to Amazon's continuous growth.
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The "cogs" on Amazon's flywheel add momentum to one another, allowing the company to grow. For example, Prime offers lower prices, which attracts more traffic, which attracts merchants to sell on the site, which increases the product selection, which improves the customer experience, which allows Amazon to grow and maintain a lower cost structure. And the wheel keeps turning.
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