I came into this book hoping to crystalize my feelings about Amazon and left with a significantly deeper understanding of the company, the american economy, anti-trust regulations and PR influence. I know how i feel about Amazon a lot more than I did last week.
Ill start with some facts before i get into feelings:
Amazon is an everything company- even more so than most people realize. They are basically the largest retailer in the country (and the world), they are the single largest logistics company by parcel volume, they have the most powerful cloud service in the world, they own massive production studios and churn out tons of streaming content, they are branching into medical services... it is incredible difficult to go a day in america without engaging with (or giving some of your data to) Amazon.
They are one of the country’s largest employers, were incredibly valuable during the pandemic (in terms of PPE, grocery delivery and employment). Amazon pays billions in taxes each year, despite exploiting every possible loophole. (Bezos himself has weirdly advocated for tax reform). They have a MASSIVE PR wing spanning both parties that they use to influence legislation in their favor (from state and local tax breaks to anti-trust legislation).
Bezos started as a Quant at a prestigious NYC firm in the early and mid 90s where he was tasked with researching the effects of the newly formed internet on retail and commerce. He really quickly realized this could change the world and made a huge bet, moving his whole life to Seattle, Washington (for tax breaks and to poach from microsoft). They started selling book but Bezos said himself "it is not about books."
One of the key takeaways from this book for me was that amazon kinda got the best of both worlds from Wall Street. Retail companies need to show profits for their stock to grow (duh). Why would anyone invest in a retail company if they would never see returns? Tech companies (esp in the early 90s) were an entirely different ball game. Investors threw money at Amazon even though Bezos explicitly said they would not be profitable for a long time. Amazon was a retailer at first, selling books, CDs, cables etc but got the investment treatment of a tech firm.
AWS came out of a big internal problem- as the company grew and as teams tried to improve the user experience, progress was relatively slow. Developers had to design the entire back-end of things every time they wanted to make a change, constantly worrying about server storage and infrastructure before they could even start building features. Amazon invested massively in this space and delivered a cloud solution as a service- other companies wouldn't have to suffer like amazon did.
AWS is one of the main reasons Amazon is such a successful retailer today- they are able to buoy themselves, charge low prices off the profits from an entirely different business. They were able to branch into new businesses and take losses while they grew because of this sepereate and massive pile of money. PLUS think of the data
Amazon's retail is split in 3 different pieces: first-party sellers sell in bulk to amazon who resells on its platform (this is like when you buy tidepods). third-party sellers are like etsy- its a marketplace where indepdenent business list their products on amazon. it is actually a great service and millions of sellers are able to list products across the country reaching buyers they never could before (more on how this is actually got toxic and bad later). then there's private lable: shit amazon manufactures and sells (like amazon basics and amazon essentials - hdmi cables, vitamins, that shit).
Pretty weird that there's this internal competition on the same platform for similar goods huh??
Ok here's where stuff gets bad: this is just some of the stuff that they do that is objectively evil-corp
Abusive treatment of warehouse workers (which the book barely covered), Private label stealing seller data, Amazon (particularly the alexa fund) stealing ideas, predatory bundling of prime + Fulfillment by Amazon + Advertising, de-listing competitors, and overall bullying.
Amazon says there are firewalls in place that separate the third party marketplace from the rest of the business. It would be bad if say... the private label team could look at which products are selling well and go to china and make the products themselves for way cheaper and undercut the third party seller. That would seem fishy and bad right???? well they did that shit and lied about it.
It seems shitty for a massive company to take months of acquisition/partnership meetings with a smaller company with a unique and innovative idea only for the big one to remove NDA terms and straight up steal the idea and make it themselves right??? (cough cough thats literally alexa)
It would be bad if say new tech wants to be alexa enabled but in order for them to do that, the company needs to send amazon the product for extensive testing before (and then allow that very same company to reverse engineer the new tech).
Amazon makes you use their logistics wing and sometimes pay for advertising to get the prime badge - if you dont theres a chance you wont have the Buy Box (which is literally the box that says add to cart, no idea how that works if you dont have that). They raise fees constantly and squeeze the seller to paper thin margins....basically amazon takes HALF of the sale and HERE is where it gets sticky for them
This was basically the foundation of an anti-trust suit brought against them by the FTC in 2023. The basic premise is that Amazon requires sellers to sell at their lowest price on amazon (for a while contractually and now by the algorithm lowering the listing). They also raise listing fees, make you pay for fulfillment and advertising- that shit is expensive. So what do you do as a seller- you pretty much have nowhere else to go, you cant make ends meet so you gotta raise your price... but your lowest price has to be on Amazon so you have to raise the price at other retailers and even your own site. The FTC is saying that amazon (who claims that they are customer obsessed and want everyone to have everything cheaply and quickly) is overall raising the price of goods in america.
So what do we think? Amazon is objectively incredible. in 30 years they changed the way people even think about buying stuff- you can have basically anything in 2 days for basically as cheap as it gets. millions of people have an outlet to sell stuff to a customer base that was literally impossible to reach before. They solved logistics and cloud storage.
Also they are bullies, they abuse workers, steal ideas, throw money at politicians for preferential treatment.
Amazon is worth 1.5 TRILLION dollars- i dont believe they cant fix so many of these awful practices. I dont believe they need to have ambulances outside of warehouses instead of installing ACs. I dont believe they need to take 45% of the sale.
It is a story of innovation and greed, good book!