User: Armando Singer

The beginning of a new era

On: The End Of The Amazon Era

Amazon was never in the book business. Since the beginning, Amazon has been in the business of selling convenience and a great shopping experience. (Bezos chose books first because they are the ultimate commodity. They are well categorized and indexed with ISBN numbers. There is a large body of existing product information in the form of reviews, blurbs, and publisher information. And the existing book supply chain infrastructure was reliable enough to fill orders on demand.)

Bezos always had expansion in mind. He realizes that what is more important than the commodities themselves is the value that the Internet adds. The intangibles are important, not the hard goods themselves.

Amazon has always lost money. The argument that they are expanding into more industries and still losing money indicates two things:

1. In the new network economy increases competition to the highest level possible. Your competitor is only a click away. You must be the cost leader. You must have the inventory that people want. You must provide lots of product information. You must make it easy to people to collaborate. The list goes on. Because the barriers to entry in the network economy are so low, the way to stay competitive is to deal in razor-thin profit margins and provide a superior shopping experience.