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JEFF BEZOSHis Amazon.com transformed book retailing in the 1990s. No in-print title was too obscure for the inventory, including hard-to-find academic works. Textbooks, though, were not his forté. Amazon textbook prices generally weren't competitive.
By John Vivian
When the government got out of the Internet business in 1994, Jeff Bezos foresaw a retailing revolution. He figured that anything that could be easily shipped could be sold on the web. He worked up a list of 20 products that might work. Books were on the list, but something seemed wrong. In all the history of direct-mail retailing, going back Montgomery Ward in 1872, nobody had gone into books-by-mail in a comprehensive way. Why not? Was it because the catalog would need to be so massive that it would be too costly to ship?
Bezos, an engineer and computer scientist by training, knew next to nothing about the book trade. Hoping to pick up some insight, he dropped in at the American Booksellers national convention and wandered booth to booth. There he learned that the nation had two major wholesalers, Ingram and Baker & Taylor. Both had master catalogs -- on CD-ROMs.
That was one of those magic moments when everything comes to together. Bezos, age 30, and his wife packed their Chevy Blazer and moved to Seattle, a haven of computer talent, to hire help and start the enterprise. Setting up a headquarters on saw-horses in the garage, Bezos began building a web site. Without publicity, the site went live quietly in July 1995 -- no fanfare. Within a month, there were customers in 45 states. Within a year the enterprise drew the attention of the Wall Street Journal. The article sent business rocketing.
It took a year for Barnes & Noble and other established booksellers to get sites operating. By then, amazon.com was miles ahead. Sales reached $1 billion in 2000. Strange though it may seem, though, the company hadn't turned a profit. Bezos said the best was yet to come. He kept building -- more multi-acre warehouses throughout the country, more webmasters, more packing clerks. Spending outpaced revenue by $350 million in 2000. No problem, said his investors. They had faith in his vision, which was putting amazon.com into all kinds if new direct-mail lines: Videos, pet products, bridal gifts, prescription drugs -- even an online flea market.
In 2001 Bezos irked authors by allowing customers to use the Amazon site to sell used books. The Authors Guild objected, first in a polite but firm letter, then in a call for its 8,200 members to boycott Amazon. The Guild, whose members realize royalty income only from new books, said that promoting used-book sales was author-unfriendly and working against the cultural advancement by eroding the financial incentive for authoring. Bezos was unrestrained in his response. He called the Guild "a small but vocal organization" that was narrowly self-serving. Also, he said, the Guild was wrong: "Offering customers a lower-priced option causes them to visit our site more frequently, which in turn leads to higher sales of new books while encouraging customers to try authors and genres they may not have otherwise tried." Bezos threw a barb at the Guild: These are the folks who advocate "charging public libraries royalties on books they loan out."
SA2 bibliography:
Robert Spector. Amazon.Com: Get Big Fast. HarperBusiness, 2000.
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