AmazonSmile - A Different Strategy & A Different Impact

Yesterday I received an email about AmazonSmile. Have you heard of this? 

Well, since the autumn of 2013, customers who purchase items on AmazonSmile will be able to direct a donation from Amazon to a charity of their choice that is 0.5% of the purchase price.

I was surprised that: (1) I had never been emailed or presented about this before while shopping on Amazon and (2) why have I not heard from charities that I support about this?

Why this program is great?
First, there is no cap on the donation amount, as USA Today pointed out, that even high-end art is eligible and theoretically Amazon would make a  $25,000 contribution for a $5 million piece of art work.

Next, we, the customers, have the opportunity to help our charities. Typically, businesses will have a limited selection of charities to choose from, if at all, when running a campaign like this. Through the AmazonSmile Foundation, they will make the donation to your personally selected nonprofit (which they state there are over 1 million participating). This clearly adds more value to the customers purchase and may push some consumers to buy from Amazon, thus giving Amazon a stronger hold on their strategic position against its competitors.

If we compare AmazonSmile to Walmart, Walmart has its local giving program and donated $316.3 million in 2013. It awards grants to several different nonprofits in communities, but only if they are one of the "pillars" Walmart is focusing on (see side table "Walmart Foundation Facts).

We were not able to find out how much Amazon donated in 2013 or 2014. Making an estimation is difficult as not every purchase happens on AmazonSmile, not all products are available on AmazonSmile, and international customers cannot pick their local charities. However, in 2013 Amazon totaled $74.45 billion in revenues and if we pretend the same revenues for the 12-month period from when the program began and all purchases were made through AmazonSmile, that would be a donation of $372 million (a very high estimate).

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Walmart Foundation Facts

• Donated $1.3 billion in cash and in-kind donations around the world in 2013.
  
• $316.3 million of 2013 donations were cash.
• Focuses on programs that focus on: hunger relief & healthy eating; sustainability; women's economic empowerment; career opportunity; and special interests including veterans & disaster relief. 
• Walmart 2013 Revenues: $473.1 billion
• Total 2013 Donations/Revenue - 0.3%

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