Tuesday, July 22, 2008

Jeff Bezos Wants to Rule the World!

Okay, I really don't know that for a fact, but if I look at all of the cool stuff Amazon.com is doing these days, I'm positive he wants to rule the Internet.

Let's just list some of the things that Amazon has going for them.
  • Projected $20 billion in sales in 2008
  • 30% of the units sold through Amazon were from 3rd party sellers.
  • Amazon Web Services continue to grow, even with some service hiccups - AWS provides Cloud computing services for developers and start-ups. (Its all techie stuff)
  • Millions of associates worldwide are promoting Amazon product.
  • Amazon will soon be opening up China and India to 3rd party sellers (sorry no details on when)
  • FBA (Fulfillment by Amazon) is available in the US, Germany, UK and Japan and the year-and-a-half old program is growing fast.
  • Amazon's share of the MP3 Digital Download market is growing, with some estimates suggesting Amazon has from 8 - 10% of the market.
  • Webstore by Amazon has opened its doors to media sellers, in addition to every other category of seller.
  • TextPayMe service allows balance transfers and payments to be made by mobile phone, email or the web.
  • TextBuyIt service allows customers to compare pricing from their mobile phone.
  • Amazon isn't just a media retailer anymore with everything from Automotive parts to Home and Garden supplies available for sale.
  • Endless.com online shoe retailer.
  • Amazon isn't afraid to develop and launch their own sites and platforms, unlike other companies that have to buy them. Why buy something when you can build it yourself and leverage all of your infrastructure.
  • Now you can buy product through your TiVO.
  • And the list goes on and on.

I've heard many people say that Amazon is going to be the WalMart of the Internet and I have to disagree ... I think it's going to be bigger than WalMart.

Just my 12%

5 comments:

Andy Geldman said...

I agree, Amazon are doing a lot of cool stuff, and you can see a coherent strategy in it.

The scalable technology services they provide like cloud computing, message queueing, and hosting are innovative in their flexibility and ease of use.

The third-party seller integration is pretty seamless - a far cry from eBay where efforts to disguise the fact that there are multiple sellers (eBay Express anyone?) are pretty thin.

Tony P. said...

Randy,

Read this interesting article:
http://glinden.blogspot.com/2006/04/early-amazon-auctions.html

Amazon Auction Advantage = THE new name
$5 minimum starting bid
Sellers must adhere to A-to-Z Guarantee
Sellers must have return policy
Have Microsoft 'sponsor' it (MS already is an Amazon partner, there's the moola source!)
After Yahoo is bought by MS (next month), there's the advertising source!


Jeff will then own the top 75% of ebay customers (sellers). He currently shares them with ebay, but a king of the world needs to own, not share.

Whatcha think?

Randy Smythe said...

Tony,

Did you see Ina's comment?

Ina Steiner said...
Great post!

And now in 2006, eBay has introduced a fixed-price marketplace to compete with Amazon, called eBay Express.

You said, "Amazon customers turned out to be quite timid about exploring the auction site, fearful of the lack of guarantees and customer service, unattracted to the idea of bidding."

I'm not sure that bodes well for eBay Express in terms of capturing the "Amazon shopper" demographic, since eBay Express falls somewhere between eBay.com and Amazon.

eBay executed poorly with Express and Amazon executed poorly with Auctions. This should not have been the case and there is a case for a new Amazon Auctions.

Separate site, they've already got it built.

Tony P. said...

Randy, the big A may not have produced great numbers (I've no doubt that the economy does SUCK), but their growth says it all. Shoestring margins makes 'em that way - their operating income is slim - pennies of profit per customer. BUT, they have more customers showing up all the time. Meanwhile, back at the ebay ranch, they are running off the old ones and confusing the new ones.

In my delusional mind, I'd like to use your blog to convo Mr. Bezos, 'cuz I just know he will read it. :-)

Jeff,

You build it and they will come. They will come in such numbers that you'd better have lots of cash and support, at the ready. They will come en mass, so much so, that if the servers and Telco lines can handle the traffic, 'exodus maximus' can be completed within a week.

One small problem. Bidders. The lack of them in Amazon's auction-site attempt was a factor, as was Amazon's primary demographic, the 'spearfishing' buyer. Spearfisher = Get in, click it, then get out.

1. The Amazon site now has a different demographic - the influx of ebay sellers have brought with them the type of buyer that has bid on an auction. No, not all of these newly-acquired Amazon users have experience with an auction, but some have and that has significance.

2. The general bidding/buying ecommerce public has transformed from the rigid mindset of yesteryear, to a more adventurous attitude of today. Ebay is (inescapably) known as The Auction Site, but the fact that other auction sites DO have sales proves that ebay is no longer a monopoly, in the bidders' mind.

3. Ebay sellers have been directing their customers to off-ebay sites for quite a while. They have become very good at it. The effort to direct those customers to an auction site that bears a household name which (almost?) everyone recognizes, would be doable.

4. Re-directing those bidders to an Amazon auction site would require a team effort. Incentives to bidders - a team effort from both Amazon and the sellers - would provide grist for the advert mill, motivate the bidders and set the tone for the Amazon-Seller relationship.

5. Amazon runs its business as it sees fit, and there's no place for that ebay "community" PR tripe. In truth, ebay sellers realize that they, themselves, are the only true community and they would be turned-off if that term was used by Amazon. But, the word Team would be acceptable by both parties.


Amazon could start small. Send out a survey to its 3-P sellers asking if they'd be interested in an auction format site. Open the site with only a few thousand sellers, more or less, just to test the waters. This may not be the ideal test environment; too few offerings may not give an accurate result. Similar to opening a Wal-mart store, but with only 100 products. For this to actually succeed, it may require a Texas Hold'em approach.

Jeff, go "all in" and you'll own the world!

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