Lessons From Amazon
August 2, 2017
Five years ago, I taught a course called Book Publishing Overview. I asked the students to read The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone. Since these students were earning a degree in publishing, many balked; They viewed Bezos and Amazon as the Plague, devouring one independent bookstore after another, because this behemoth had staked its claim on the publishing industry.
I made them read it anyway.
As we discussed the book and Amazon, I approached my lecture from a different perspective — one of respect. I told them that regardless of how they felt about Amazon’s business acquisitions or future plans, Bezos and company deserved some respect. Why? Think about it: When Amazon started, they planned on no profits for five years. In fact, Bezos proposed selling books at a loss to build their customer base. A risky proposition, but one that paid off in a big way. According to Fortune, Amazon is worth more than Walmart, Costco, and Target combined. To propose and adopt a revenue-negative plan for five years took vision, guts, and patience. This approach, no matter how one viewed the company, deserved respect.
Of course, we discussed the impact of Amazon’s undercutting. In the span of a few short years, more than half of the independent bookstores had closed, leaving some to claim that print was dead;
But I don’t want to solely focus on how Amazon’s book business undercut the indie bookstores or how it changed the publishing industry — it is bigger than that. Let’s look at the company’s mission statement:
“Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon has been the go-to website for shopping, and it continues to achieve its mission. It has provided everything from books to batteries and dolls to diapers, and , as of mid-June of this year, they have entered the fresh food market. There is little that one can’t purchase on Amazon — a short list that includes pets, guns, real estate, vehicles, lottery tickets, prescription medications, and cigarettes (at least the kind with tobacco).
And, while I am happy one can’t purchase a kitten on Amazon (though I’m sure it has been discussed), I confess that my most recent purchase from Amazon was a $40 metal bed frame. It was convenient. Convenience and price are the main reasons for Amazon’s huge success. It is easier to order a book from Amazon and have it delivered the next day than to make a trip out to the bookstore. Why not order that package of paper towels? After all, if you pay the premium fee for Amazon Prime, the shipping is free, and a trip to the grocery store can be crossed off the list.
I'm singling out Amazon because the effects of their growth and expansion to various markets is easy to document. And, while independent booksellers have found other ways to generate revenue and are on the rise, other small stores are closing, as are larger stores such as JC Penny and Macy's. Small and large stores alike can't compete with the online market. According to Business Insider, Amazon controls 43% of the online market.
What does this really mean? Well, I drive past it several times a week. Our local toy store went out of business, as did the hardware store and a clothing store. The small businesses struggle for many reasons, but online competition is fierce. I am as guilty as the next person for choosing convenience and price over Main Street. Technology has changed how business functions, bringing significant positive advancements, but there have been costs as well. While some malls are expanding, others are being abandoned. Main Street across this country is suffering; small shop after small shop is being forced to close. Main Street used to be the heart of every community.
There is no question that business models are changing due to rapid technological advances. The question is: how can we, as a society, find solutions that benefit businesses — small and large, Main Street and malls — without taking humanity out of the equation?
Anne Converse Willkomm
Director of Graduate Studies
Note: Amazon logo from Amazon.com