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On Jeff Bezos, Amazon, and taking over the world

Posted in business, and science and technology

Amazon.com founder Jeff Bezos, whose personal net worth is over $30 billion and who personally purchased the Washington Post newspaper in 2013 for $250 million, is a data-driven control freak with a sweepingly grand vision for commerce. The Internet wouldn’t be what it is today without him, and Amazon has had long-lasting, possibly permanent effects on book publishing, if not the dissemination of published information generally.

However, even though I feel conflicted about Bezos and the potentially negative effects he’s had on book publishing and on writing in general, I don’t tend to buy things any less frequently from him. Amazon’s product selection is nearly all-encompassing, and they have pretty much perfected the online purchase and fulfillment process. Unlike several far left-leaning columnists and opinion leaders I know, I also have a hard time thinking that the guy is truly evil. I do, however, suspect a certain generalized lack of empathy and compassion on his part for his fellow human, along with his placing seemingly little value on subjective human experience or on literary and artistic expression. Those may not have made the cut when his personality traits were being formed.

George Packer is one of the world’s greatest columnists and writers, and this extremely thought-provoking, long-form piece on Jeff Bezos and Amazon in a recent issue of The New Yorker is an excellent example of his careful and considered work:

http://www.newyorker.com/reporting/2014/02/17/140217fa_fact_packer

From the article:

It wasn’t a love of books that led him to start an online bookstore. “It was totally based on the property of books as a product,” Shel Kaphan, Bezos’s former deputy, says. Books are easy to ship and hard to break, and there was a major distribution warehouse in Oregon. Crucially, there are far too many books, in and out of print, to sell even a fraction of them at a physical store. The vast selection made possible by the Internet gave Amazon its initial advantage, and a wedge into selling everything else. For Bezos to have seen a bookstore as a means to world domination at the beginning of the Internet age, when there was already a crisis of confidence in the publishing world, in a country not known for its book-crazy public, was a stroke of business genius.

In 1995, in Chicago, Bezos manned an Amazon booth at the annual conclave of the publishing industry, which is now called BookExpo America. Roger Doeren, from a Kansas City store called Rainy Day Books, was stopped short by Amazon’s sign: “Earth’s Biggest Bookstore.” Approaching Bezos, he asked, “Where is Earth’s biggest bookstore?”

“Cyberspace,” Bezos replied.

“We started a Web site last year. Who are your suppliers?”

“Ingram, and Baker & Taylor.”

“Ours, too. What’s your database?”

“ ‘Books in Print.’ ”

“Ours, too. So what makes you Earth’s biggest?”

“We have the most affiliate links”—a form of online advertising.

Doeren considered this, then asked, “What’s your business model?”

Bezos said that Amazon intended to sell books as a way of gathering data on affluent, educated shoppers. The books would be priced close to cost, in order to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet. (Amazon says that its original business plan “contemplated only books.”)

Afterward, Doeren told his partner at Rainy Day Books, Vivien Jennings, “I just met the world’s biggest snake-oil salesman. It’s going to be really bad for books.”

§ § §

Before Google, and long before Facebook, Bezos had realized that the greatest value of an online company lay in the consumer data it collected. Two decades later, Amazon sells a bewildering array of products: lawnmowers, iPods, art work, toys, diapers, dildos, shoes, bike racks, gun safes, 3-D printers. Amazon’s code of corporate secrecy is extreme—it won’t confirm how many Seattle employees it has, or how many Kindle e-readers have been sold—so it’s impossible to know for sure, but, according to one publisher’s estimate, book sales in the U.S. now make up no more than seven per cent of the company’s roughly seventy-five billion dollars in annual revenue.

I happened across that article after listening to this enlightening Radiolab piece on what sound like deplorable working conditions inside of Amazon’s fulfillment centres:

http://www.radiolab.org/story/brown-box/

Here’s a photo gallery of the inside of one of Amazon’s 1.2 million-square-foot warehouses:

http://allthingsd.com/20131223/this-is-what-it-looks-like-inside-an-amazon-warehouse-slideshow/

The following piece on Salon by Simon Head also delves into the working conditions at Amazon:

http://www.salon.com/chromeo/article/worse_than_wal_mart_amazons_sick_brutality_and_secret_history_of_ruthlessly_intimidating_workers/

The Jeff Bezos topic page on Quora is here:

http://www.quora.com/Jeff-Bezos

Packer also reports in the article I mentioned above that Bezos had originally named his company Relentless, which best represented his long-term vision for dominating online commerce worldwide. Look where that domain name points to now:

http://relentless.com

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