One Click: Jeff Bezos and the Rise of Amazon.com by Richard L. Brandt

Author:Richard L. Brandt
Language: eng
Format: mobi, epub
Tags: Business, Corporate & Business History, Electronic Commerce, Computers, General, E-Commerce, Biography & Autobiography, Business & Economics
ISBN: 9781101516232
Publisher: Penguin
Published: 2011-10-27T00:00:00+00:00

Chapter 10

Who You Calling a Bookstore?

Bezos’s plans to expand beyond books started a year before those plans became known to most of the world. By the end of 1998, Bezos had proved his online model was able to compete with physical bookstores, at least in terms of selling, if not in profitability. With sixteen hundred employees at the time, his annual revenues amounted to $375,000 per employee. Barnes & Noble’s twenty-seven thousand employees were delivering less than a third of that amount apiece. Since he opened the store in 1995, sales had doubled every 2.4 months, on average. At the end of 1998, sales were still growing at over 300 percent a year, compared to 10 percent at Barnes & Noble. The site was able to turn over its inventory two dozen times a year, compared with three times a year at Barnes & Noble.

Now he was ready to take on more than books. In June of that year, after months of planning, he debuted a music store to sell CDs under the same model he was using to sell books. It had a database of 125,000 titles people could buy, ten times the number most physical music stores had to offer, and the titles were discounted by up to 40 percent. The site included professional and customer reviews, a top-sellers list, music news, recommendations, and an “essentials” list for anyone creating a collection of music. It also offered sound clips of 225,000 songs.

With that announcement, Bezos revealed his true ambition. “Our strategy is to become an electronic commerce destination,” he said. “When somebody thinks about buying something online, even if it is something we do not carry, we want them to come to us. We would like to make it easier for people online to find and discover the things they might want to buy online, even if we are not the ones selling them.”

Besides, he said, it was something he’d always planned to do, although few people seem to have known it beforehand. In an October interview with the San Jose Mercury News, a reporter asked Bezos if selling CDs was a natural outgrowth of Amazon’s business or if it was a possibility from the beginning. “We’ve always said we would expand into areas where we could leverage the three things that businesses can often leverage: our brand name, our skill sets and our customer base,” he replied. “Music was a natural place where you can leverage all three of those.”

Bezos had help building the site. He could do something no traditional retailer could easily manage. Months before launching, he sent out invitations to “build the music store of your dreams” to Amazon customers. About twenty thousand responded. Although Bezos touted the importance of the feedback, the customers just asked for the same things they liked about Amazon’s bookstore: selection, low prices, and convenience. To ensure the last feature, he simply integrated the CD store into Amazon’s already existing infrastructure: The site was redesigned to make it easy

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