Table of contents

Child pages

• He pronounces his name "BAY-zohs" (Source)
• Wikipedia - Jeff Bezos
• Wikipedia - Amazon.com

Articles / Videos

• 2000.04.05 - amazon.com - Get Big Fast : Inside the Revolutionary Business Model That Changed the World
• 2001.05.04 - Academy of Achievement - Interview with Jeff Bezos
  • fantastic interview
• 2011.06.14 - Meet Amazon.com’s first employee: Shel Kaphan
  • very interesting article / insights
• 2012.03.31 - Amazon a virtual no-show in hometown philanthropy
• 2012.12.31 - One Click: Jeff Bezos and the Rise of Amazon.com
• 2013.10.15 - The Everything Store: Jeff Bezos and the Age of Amazon
• 2016.06.08 - Code Conference - Jeff Bezos
  • 45:00 - He talks about how Amazon was possible because a lot of the necessary components were already in-place.
  • 54:10 - I don't like tight agendas for my meetings.
  • 59:20?
  • 1:11
  • 1:13:50 - India needed more local-market customization
  • 1:19:40 - "Product roadmap questions generally shouldn't be answered"

• 2018.05.21 - Eugene Wei - Invisible Asymptotes

  • We had two ways we were able to flush out this enemy. For people who did shop with us, we had, for some time, a pop-up survey that would appear right after you'd placed your order, at the end of the shopping cart process. It was a single question, asking why you didn't purchase more often from Amazon. For people who'd never shopped with Amazon, we had a third party firm conduct a market research survey where we'd ask those people why they did not shop from Amazon.

    Shipping fees.

    People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I'm convinced, so critical to much of how we unlocked growth at Amazon over the years.

    People don't just hate paying for shipping, they hate it to literally an irrational degree. We know this because our first attempt to address this was to show, in the shopping cart and checkout process, that even after paying shipping, customers were saving money over driving to their local bookstore to buy a book because, at the time, most Amazon customers did not have to pay sales tax. That wasn't even factoring in the cost of getting to the store, the depreciation costs on the car, and the value of their time.

    People didn't care about this rational math. People, in general, are terrible at valuing their time, perhaps because for most people monetary compensation for one's time is so detached from the event of spending one's time.

    ---

    Solving people's distaste for paying shipping fees became a multi-year effort at Amazon. Our next crack at this was Super Saver Shipping: if you placed an order of $25 or more of qualified items, which included mostly products in stock at Amazon, you'd receive free standard shipping.

    The problem with this program, of course, was that it caused customers to reduce their order frequency, waiting until their orders qualified for the free shipping. In select cases, forcing customers to minimize consumption of your product-service is the right long-term strategy, but this wasn't one of those.

    That brings us to Amazon Prime. This is a good time to point out that shipping physical goods isn't free. Again, self-evident, but it meant that modeling Amazon Prime could lead to widely diverging financial outcomes depending on what you thought it would do to the demand curve and average order composition.

    To his credit, Jeff decided to forego testing and just go for it. It's not so uncommon in technology to focus on growth to the exclusion of all other things and then solve for monetization in the long run, but it's easier to do so for a social network than a retail business with real unit economics.

    The rest, of course, is history. Or at least near-term history. It turns out that you can have people pre-pay for shipping through a program like Prime and they're incredibly happy to make the trade. And yes, on some orders, and for some customers, the financial trade may be a lossy one for the business, but on net, the dramatic shift in the demand curve is stunning and game-changing.

    And, as Jeff always noted, you can make micro-adjustments in the long run to tweak the profit leaks. For some really large, heavy items, you can tack on shipping surcharges or just remove them from qualifying for Prime. These days, some items in Amazon are marked as "Add-on items" and you can only order them in conjunction with enough other items such that they can be shipped with those items rather than in isolation.

    [Jeff counseled the same "fix it later" strategy in the early days when we didn't have good returns tracking. For a window of time in the early days of Amazon, if you shipped us a box of books for returns, we couldn't easily tell if you'd purchase them at Amazon and so we'd credit you for them, no questions asked. One woman took advantage of this loophole and shipped us boxes and boxes of books. Given our limited software resources, Jeff said to just ignore the lady and build a way to solve for that later. It was really painful, though, so eventually customer service representatives all shared, amongst themselves, the woman's name so they could look out for it in return requests even before such systems were built. Like a mugshot pinned to every monitor saying "Beware this customer." A tip of the hat to you, maam, wherever you are, for your enterprising spirit in exploiting that loophole!]

    ---

    The net of it is that long before Amazon hit what would've been an invisible asymptote on its e-commerce growth it had already erased it.