Slashdot Mirror
Mighty Amazon
theodp writes "Fortune reports that the patent-pending practice of selling partners' used and new goods next to Amazon's own was CEO Jeff Bezos' response to the emerging threat of eBay. Seeing an opportunity to overtake the online auctioneer as well as a way to slow the need to add warehouse capacity, Bezos 'bet big and put hundreds of his best people on it.' While Bezos' decision caused a lot of discomfort at the time, including the Authors Guild protest and the subsequent e-mail campaign in Amazon's defense, today almost 20% of the e-tailer's unit volume is sold through others, yielding revenue that is almost pure profit."
and it's probably a strong contributing factor to Amazon's finally being profitable. I don't know how much I like there being a patent on this, but it isn't a bad idea, even if the author's guild is up in arms over it. Personally, one of my favorite stores is half price books.
Jeff Bezos and Amazon are one of the pioneering companies, doing what no one thought they could, and doing it right. Amazon has become my favorite marketplace; the only time I actually go to the store and buy something is when I need groceries. If there is something that I want to check out before I buy, I'll go to Best Buy, check it out, and then go home and order from Amazon.
I think that Amazon should be rewarded for having the gumption and wherewithal to blaze this trail, but I don't see how patenting things like "One click purchasing" or the idea of selling used items next to new ones can be beneficial. They have already demonstrated that they are winning market share because of a commitment to improving efficiency and technology, and those are the best reasons to retain market share. Not preventing anyone else from doing something similar.
Why should I argue rationally with someone being irrational? I'll just mock them instead.
I worked there for two years and I have to say I was impressed. When I got there, they were still in the "get big fast" mode where profit and margin didn't mean anything. Then the bottom fell out of the market and they shifted to "get profitable fast". The entire focus and tenor of the company shifted in about 3 months. Jeff Bezos is a genius as a communicator. At Christmas, everyone goes to work in the warehouse unless you are pregnant, dying, or in customer service. How many warehouses in the world have people with doctorates making boxes? Not many, because no one else can convince a Ph.D to spend two weeks folding boxes. Bezos can....and does. When they look at a problem, they tend to throw all the smartest people at it and give them the world. It works. The warehouses are incredible...and they haven't even touched the level of efficiency they will be at in 5 years. Sure, they made mistakes. They overbuilt capacity and had to close a warehouse. But don't underestimate Amazon. The company is smart, plays fair, and is winning. It's good to see.
laugh hard, it's a long way to the bank
"We suggested to members that it was in their own self-interest not to undermine their book sales by sending Web site visitors to Amazon," Aiken said. "Amazon is turning new book buyers into a used-book marketplace. That hurts profits of publishers and the royalties for authors."
I think the Author's Guild is absolutely correct in this case. Amazon claims that it's about giving customers options, or turning new readers on to authors. But studies have shown that price has almost no impact in getting readers to choose a new author. Other factors, such as book reviews and word-of-mouth recommendations, are much more influential. Readers do look for bargains, but only after they have decided which title they want.
The publishing industry depends on the systemic inefficiency of book distribution. Profit margins, as always, are razor thin. Fortunately, most books just gather dust on bookshelves once they've been read. Usually they just doesn't seem worth the trouble to sell. This is inefficient, because the unused book doesn't end up in the hands of another willing reader. But it's a boon to the publishing industry, because the willing reader will be tempted to buy new books (with much higher profit margins) instead.
Ironically, readers as a whole benefit when they are willing to fork out more cash for a book. It's important that publishers make profits or at least break even, because this allows them to take the financial risks publishing "niche" books for smaller markets or taking chances on new, aspiring authors. The alternative is to focus exclusively on mass-selling pulp, churning out whole forests' worth of best-sellers and "Left Behind"novels.
Or a used books store.
Amazon takes a considerable amount of profit from you this way.
"I only speak the truth"
Karma: null(Mostly affected by an unassigned variable)