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The End Of The Amazon Era
What do all these diverse products have in common? If you guessed nothing, you win a free Pokemon Pileup, Amazon.Toys.com's "cunning critter" of the day on Tuesday, a day on which Amazon gave a perfunctory nod to Alice Hoffman's new novel "Local Girls" but was much more excited about (and gave more space to) what it called "Aural Fixation: Superb audio performance and fine-quality construction put the Harman Kardon FL8550 five-disc CD changer on the shortlist of stellar CD players under $1,000!"
Doesn't the hipper-than-life-itself Jeff Bezos know that books, toasters and Disney marketing tie-ins don't really work together? That they are distinctly different businesses, with different identities catering to different audiences? Bezos has tossed away his biggest advantage, the sense right or wrong that he was creating a different kind of company with something resembling an ethical sensibility.
He was only kidding. (Don't forget to link to drugstore.com on Amazon's home page for some aspirin, in case this column or those CDs give you a headache, in which case your geek buddies can send you a "Friendship" or "Love" E-card from Amazon's "E-Card" section).
Amazon was always as much mythical as real, as much hype as numbers. It always said more about the inadequate way we perceive and report on technologies like the Net than about books. Few companies have ever attracted more interest and publicity and made less money. Amazon's whiz-bang software - with its recommendation programs and one-click shopping - made Net book-buying a pleasure to thousands of people for the first time. And Bezos's public relations skills were as good as anyone's on the Web. He persuaded investors, business journalists and users that Amazon was a quasi-hip, rebellious alternative to the big bad chain stores.
Guess what? Amazon is now a lot worse than they are.
But that's over. Its distinct identity squandered, Amazon is truly a millenial corporation now. It does at least five things other companies and sites - eBay, MP3, Toys R Us, Fatbrain.com, BN.com - have done first or do better, and it's doing all of them at a loss. What a formula. And a cautionary tale. When it comes to doing digital business, hype is not only obnoxious, but nobody can really afford it anymore.
Powell's http://www.powells.com/ -- also sells used books; the online component of a physical store out in Washington
Waterstone's http://www.waterstones.co.uk/ -- based in Britain (also physical; used to have a store in Boston that closed a few weeks ago)
Books.com http://www.books.com/scripts/default.exe -- internet only; very lage
Wordsworth http://www.wordsworth.com/ -- a wonderful Cambridge, MA bookstore; buy books online
Schoenhof's http://www.schoenhofs.com/ -- extensive foreign bookseller
I wrote three books that wound up on Amazon. For each of the three, I cliked on the "I'm the author" button and wrote in a summary with a pointer to my web site and a way to contact me. Amazon never published this. So I tried again a few weeks later (this was about last summer), again, no comments from me were posted. However, a lot of the critical comments from readers somehow made it to the comments section.
I did submit comments to other online booksellers and they were posted within 24 hours. I'll take my business to fatbrain from now on.
I don't know where the hell this attack on Amazon is coming from. I've ordered dozens of books and DVD from them and have only once had a problem (*)--which was corrected with great courtesy and efficiency.
(* An extra copy of Ghostbusters rather than a Kubrick Collection, and now I wish I'd kept the extra and saved myself the agony of the shameful treatment given Kubrick's work in that over-priced under-produced set.)
Amazon has great prices, ships quickly and cheaply, and their user comments are usually (*) a valuable smart-buying tool. I look forward to using them to purchase a home theatre system and other non-media items.
(* The 5-star THiS iS thE MOST AWeSOmE MOVie EVER!!!! comments get annoying, especially when someone hasn't even seen the title for sale yet, but they're easily ignored. I browse comments and ignore the `average' rating.)
Amazon is an online merchant I've grown to trust through overwhelmingly good experiences, and I look forward to their expanded inventory.
--
#19845
Finally, that double major in Econ and Computer Science is worth the money! :)
Amazon's "generalization" of goods and services provided make sense from an economic perspective.
Consider if you will the perfect utopia of "Perfect Competition." In this nonexistent utopia all the firms would sell everything, and an equal amount of the population would go to each of these stores. In other words, if there were 5 firms, then 1/5 of the population would go to each. There would be no differences in price or quality, because each firm would be operating in perfect competition. There would be no premium for location, because travel overhead would be nil. And the products would be the same because information on said product would be free to all (think free speech and free beer.)
Because production overhead would be matched by marginal profits, and because various other costs (information, travel, etc) do not exist in this frictionless world, it would benefit each store to sell everything that can be sold, so that the other stores would not usurp the customer base. If I sold only Linux, FreeBSD and Windows NT CD's, my competitor can sell Linux, FreeBSD, Windows NT, *and* BeOS CD's, and thus usurp my market base (while keeping his). The increased customers from my store will make up for the cost of stocking extra copies of Linux, Windows and FreeBSD.
Of course this is never going to happen in the real world, because we do have travel expenses, and information is not perfect and free. Generalization has usually been restricted to areas which have a need of it, e.g, inner city corner stores where mobility within the block is free (walking) but mobility outside is not, or spread-out midwestern towns with a Wal-mart, but the next town or mall is 20 miles away.
On the Internet, however, the travel restrictions go down exponentially (although bandwidth is a concern, you can theoretically roar through on a text-only connection), and information becomes cheaper to produce (although quality assurance is another story entirely). Slopping up a web page takes no paper, you don't have to pay for a print ad, etc etc.
By this logic (which has gaps, because I don't think I have time to quote my books nor does anyone have time to read them, myself included =P ), it is befitting for Amazon or other on-line firms to generalize.
What would happen if Amazon only sold books and E-bay decided to sell books too? What would stop E-bay from stealing Amazon's customers? E-bay could as easily stock the books that Amazon stocks from the increased ex-Amazon revenue alone. And the cost of developing a front-end is negligible: same on-line engine, it's a sunk cost and it's nearly free to run a search-and-replace function to replace "Auctioning Stupid Computer Parts" to "Selling Stupid Books".
The Internet is the closest thing to Perfect Competition that anyone has seen, and the only thing holding it back is a Quality Assurance system (it's easier to lie over the net).
Perhaps we get the Internet ISO 9000 certified? heh.
me
mxfara@not^a^chance^spam^breath.wm.edu
Three Step Plan:
1. Take over the world.
2. Get a lot of cookies.
3. Eat the cookies.
the good news: A Katz article with only 442 words!
Chuck
I have a very short attenti....
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Yes, I remember books.com too, from the time they were accessible via telnet only and then their move to the WWW. I made my first online shopping there. They had a very nice service. Their interfaces where never as good as those of Amazon, but I still continued to buy some books to them.
They offered ebooks too... It was a pleasure to return there.
Until one day... they were bought (by Cendant, I believe). Suddenly, the spirit was gone. Only the name remained. They moved to Windows servers. Their interfaces were horribly broken, their uptime a disaster. Marketing at its worst was there to ruin it all.
The BookStacks we knew and love, the BookStacks that should be praised in any history of the bold online commerce pioneers, had died.
For some of those who had been on the Internet since before the WWW big bang, it was a very, very sad day.
What is the point of all this vitriolic rambling?
You accuse Amazon of becoming a 'tacky online K-Mart'. The point of being a consumer is finding the best price for the goods you want to consume. If that means shopping at K-Mart instead of Eddie Bauer, then shop at K-Mart.
From a programmers perspective I will agree that an expanded Amazon is a bit confusing. I would never extend my bookstore object with a buyToy() method. It isn't object oriented. But Amazon exists in the business world, where being a bookstore does not preclued you from selling other things too. If Amazon is able to expand their market and include toys and electronics, more power too them.
I have been an investor in Amazon.com since mid '98. To investors, and to those journalists that would listen, Jeff Bezos has firmly stated that he NEVER wanted Amazon.com to be "just an Internet book store". Bezos always wanted to have the best Internet shopping experience. He believes that an e-commerce business is vastly more efficient than a "brick and mortar" business. This means that inventory can be sold at lower prices, and lower profit margins, while still turning over fast enough to be profitable. In order for this to work you need to have a LOT sales. This means building a strong brand FAST. Books just turned out to be the fastest way to start a very large e-commerce operation for amazon.com. Now that have many customers and many return buyers (67%), they are in a perfect position to expand into more difficult markets. Also notice that the same infrastructure makes their book sales so efficient works equally well for their other endeavors. Their customers do not have to re-learn a new interface, enter in their personal information for the 10000th time, or figure out how to contact the company. It's all the same.
Many stock analysts insulted Amazon investors for running up the price of an "internet bookstore" that wasn't making any money, and in fact publicly stated that they were going to spend MORE. Now it should be clear why.
My humble opinion..
Aramis
Amazon was handy for relatives sending gifts and the like, but they may now suffer for what is killing Yahoo -- too much added junk, not enough attention on what made them worth visiting in the first place.
Oh, and nice article Jon. :)
-- 'As it all washes away you know -- as it all is one, no one is alone.' -Cosmic Disorder
Sorry, Jon, but your article misses the mark with me. I never idolized Amazon as anything other than a more convenient bookstore, but apparently you did. Stores can't make money with books anymore; Amazon is selling the NYT Best Sellers list at a loss, and as a whole their book business hasn't turned a profit yet, either. They have to branch out to other markets where there is still profit to be made. And, because the Amazon name has great market recognition, they're leveraging it. Simple business, not moral decay and a fall from grace.
. . . your comments on Amazon are pure horse puckey. Bezos managed to get an unfathomable amount of mindshare with the Amazon name, and it would be sheer folly for him not to leverage it to the hilt.
Let me ask you one question: Does Amazon still provide the same high-quality (IMHO) service with respect to books? Has the bookselling actually suffered?
No? Then stop sounding like such a nostalgic old fogey. Besides, what's wrong with K-mart, you big snob? Face it, this posting is just like your earlier piece on the end of the Wired era. All you're doing is bitching that the hoi polloi have invaded your sandbox. Boo hoo.
whuppy enjoys smelling like diesel fuel
Evidently, if it's not "new media" and "trendy digital lifestyle", then it's a "sell-out" and "tacky". Frankly, this general anti-capitalist attitude and "old = bad" is driving me crazy. Bezos is not beholden to anyone except his shareholders and customers. Amazon is not a religious movement, nor a non-profit organization. Let's face it, Amazon is there to make money. Like most successful businesses, they realize that the best way to do that is to make customers feel good about the entire experience, from service to aesthetics to pricing.
Katz' articles regularly annoy and frustrate me, since he tends to espouse the outlook of "the Net will change the world completely, and it should follow my ethical outlook". It's a tool, not a religion.
"You can never have too many elephants on your team."
OK, I'll say these things up front:
- I used to work for Barnes and Noble (not in over a year, though)
- I also used to work for Waldenbooks (incidentally, owned by the same company that owns Borders and K-Mart)
Publishing has never been an industry that it is easy to make money in. Books, because of the intelligence generally required to read them, reek of elitism, boredom, and effort to too many people. Publishing houses often struggle just to keep out of the red every year. Ever wonder why it's so hard for new writers to break in to the market? Well, if you were a publishing house thinking about investing scads of money in book design/production/marketing, wouldn't you want a sure bet too?
Amazon is no different. And neither is Barnes and Noble. The Waldenbooks I used to work for was small, shabby, neglected by the corporation because of its comparatively rural location. Barnes and Noble, on the other hand, was spacious, had the most comfortable chairs I have ever sat in (I used to spend my breaks in them), and has tons of variety.
I saw an article while working at B&N that summed up the reasons why I support B&N (unfortunately, I don't have it anymore): It allows for diversity. The one I worked in had entire subsections on linguistics, anthropology. That would have been undreamed of at Waldens. The point is, while Barnes and Noble may not support diversity of vendor (i.e., other bookstores), it does support diversity of supplier (i.e., publishers). It carries thousands of publishers, from small university or religious presses to your well-known East Coast publishers like Random House, etc. That's really not such a bad thing.
The other thing I like about Barnes and Noble is that it at least curries an air of intelligence and literacy. The decor is classical, the musical selections don't tend to be your typical top40, the offerings, once you get out of the bestsellers section, are eclectic and tolerant of many ideologies. In short: It doesn't dumb itself down to the customer. It makes the customer feel all that more literate and intelligent for being there.
Barnes and Noble is not the evil empire. It's trying to make money, just like Amazon. Quite frankly, if people go to Amazon to buy a pikachu, happen to wander in to the books section, and buy a paperback while they're at it, then Amazon's "sellout" has been justified. Of all the industries trying to make money in America today, the publishing and book industries are among the most severely handicapped by modernday illiteracy, apathy, and lack of interest in anything remotely intellectual. Don't begrudge Amazon or B&N of the steps they have to take to keep people supplied with what they need to keep their minds alive.
In the end, Barnes and Noble is a reading mecca for me. If my old Waldenbooks location closes down (which it is threatened with annually), then the only bookstore in that area will be the Christian bookstore. Don't knock it if you have a bookstore near you, regardless of what you think of its commercialism. Amazon and other online book retailers have the unique ability of being anywhere there is an Internet connection. And that, for the people that shop my old Waldenbooks store, may someday be the only place they can go for a diversity of books that are selected free of religious concerns.
The principle of aggrandizement is the fundamental law of every government. - Frederick the Great
Well, if you're looking for computer books, I don't think I've seen a place that beats Bookpool. I just checked out fatbrain, which gives a 20% discount on O'Reilly books that I was looking at, compared to 35 or 36% at Bookpool. I've ordered from them a bunch of times, never had a problem, and their shipping is reasonable, too.
They're putting dimes in the hole in my head to see the change in me
They're putting dimes in the hole in my head to see the change in me.