Amazon was also able to make money selling products at little or no markup by taking advantage of the float. They'd collect money from the purchaser immediately, and would pay the vendor after 90 days. Then, Amazon would make interest on that money for the 90 days.
I do the same thing on a (very) small scale. I buy with a credit card, and don't have to cough up the money until the credit card bill is due. That gives me free use of the money for 30 days.
Pretty much all businesses do this, it's just that Amazon did it on a massive scale.
Amazon has succeeded at beating bookstores in none of these categories - but it has succeeded in greatly lowering the difficulty and impediments in case that a customer wants a specific book, the unfortunate thing for bookstores is that that user flow is extremely common and winning on that flow pretty much got them the market.
W.r.t. the other flows... Amazon is still terrible, did you enjoy The Colour of Magic? Why don't you try Magic Eraser - guaranteed to get stains out of any fabric! Curious if this book is good? Why not try reading one of the hundred shill comments talking about how this book changed their life!
I think the key here is to focus on winning a specific market segment (a significant one) and winning it hard if you can do that you too can be the next amazon.
1. I can get pretty much any book ever printed, not just newly printed books.
2. Prices are usually better.
3. The friction to buying them is very low.
If I want to buy books by the lot, such as every book in a series, I usually go to ebay.
2. Ditto. Pricing algos and greed can do insane things to prices. When I needed one out-of-print academic title recently the copies on Amazon were going for four figures. Luckily the author had uploaded a PDF to his web site.
For other books I've looked at, three figures aren't rare. Communicating with sellers directly has sometimes brought the price down to something more reasonable - a sale now being worth more than a listing that may take years to pay off.
3. This part is true - pay, wait, receive. Although it's not infallible, because some of the bigger sellers play an arbitrage game where an algo checks possible sources for tens of thousands of titles and then if found, adds a percentage to create an auto-listing. I've had orders cancelled when this process has failed, for whatever reason.
Sure. But you wouldn't find those at B&N either. Amazon isn't in danger of putting university bookstores out of business.
The key part is “decent”. Outside of the “walk out” part, none of these advantages apply if you don’t have a bookstore that matches what you’re interested in, which can be pretty difficult outside of mainstream subjects and the latest-Summer-novel-everybody-buys. There’s no discovery system that I know of that would allow you to find a bookstore near you based on what you like or want to read.
This is why I use Amazon so much: I have a half-dozen wishlists and bought my books here for years, so its suggestions are often relevant. I like to be able to compare prices between new and second-hand books from third-party sellers. Reviews may not always be great, but that’s still better that what you’d get in a bookstore: one single review from the owner, if they did read the book.
Note: I live in France, where the law requires that books are sold the same price in bookstores and on Amazon (you’re allowed to do go down max -5% on the public price). You can also ask any bookstore to get any book for you, most often free of charge. However, this means they get very little profit from it since they have to pay the shipping cost themselves.
As for books in particular - Kindle wins hands-down on convenience and portability for me, over bookstores (the 'walk-out' part is definitely covered). In my particular case, as I'm vision-impaired, Kindle ALSO wins hands-down on usability, because I can make the text any size I want. That's important enough for me that it can mean the difference between actually being able to read a book and not being able to read it.
I think I have 451 Kindle books. I can carry all of those in my pocket on my phone or in my backpack on my tablet, if I want. That's another huge advantage.
I should probably mention that given all that, I _still_ like physical books! I remember walking the aisles of Borders, but that was because they were huge and they had books in the niche I was looking for. I fondly remember a small bookstore that used to specialise in software development and IT books and they had a great selection of game development books. I used to love that place! For me though, that was all before I got a taste of the convenience of Kindle. Getting the book is worth more to me than stopping and having a nice coffee at the bookstore.
Maybe post-Amazon retro bookstores provide this, but prior to Amazon bookstores were mostly garbage. You could only browse what they had, which was far from everything. Prices were also very high. I remember as a kid bringing in pencil and paper to copy down algorithms from books that were simply too expensive to purchase. There were also few if any 'experts' at the book store.
For me, the internet + Amazon (and now 1/same day delivery) is better than a book store in every way.
The only place that I know of now that provides something close to what your are romanticizing about is libraries. People who work there for the most part still care about books and understand their catalog. But, anything even remotely popular will likely be checked out which means I'll end up back at Amazon.
However, the Barns and Nobles and Chapters found out that if you knew what you wanted, and gambled on going to a small generic or even niche bookstore, you often had to put the book on order or get something you didn't want. They capitalized on this by stocking much more books than a smaller place could hope to hold. They still could on the surface handle the browsing public, so they quickly put the smaller generic stores out of business, and forced many niche stores out too.
They still have the issue though, that while a small generic may be able to stock the selection for around 80% of requests, and the larger stores 95%, Amazon immediately would sell you the book, either sending it out to you quickly or seemlessly putting them on back order. Also, in the early days, the unfiltered reviews and recommendations based on the other buyers of the books were great in identifying if you really wanted to buy the book anyways.
While Amazon now is facing issues with recommendations, 10-15 years ago it was hugely different, and provided a seriously better customer experience. What I've actually noticed, is that if any small niche bookstore has survived until now, they actually are starting to provide a real differentiated experience. A small, curated selection of books, that I feel easy to browse and I feel they've been filtered already. I also don't know off hand without leaving this and searching, wether barns and noble is still in business.
It's not a flashy service by all means and has definitely been neglected by Amazon since the acquisition; the community makes it what it is, and it is a very high quality community!
The more human interaction I can avoid, the better, so I'm recharged when I have to interact with people.
Honestly, his books are just amazing though, quite worth a read.... possibly skipping to start at Equal Rites since The Colour of Magic and The Light Fantastic were less polished than his later works - but do check out the Tim Curry having movie covering those first two books... maybe bring a power point presentation or two along to appease any power hungry wizards though.
I think it's also possible that at least part of Amazon's success was due to creating/increasing price sensitivity in an era where wage stagnation has become more and more apparent. That is, they are also the Dollar Saver & K-Mart of the Internet.
The segments that Amazon has conquered may be more abstract than those they're usually given credit for. Segments like "poor people."
Surely that's only true for a vanishingly small subset of fields of interest?
e.g. I want to read books on construction site drainage. Is the dude in Borders going to have any tiny clue about that?
I mean come on, Amazon didn't invent obscure topics. Bookstore people would know more specialized stores, though this was naturally less true at chain stores. This was at least as effective as Amazon giving you a list of other books bought by people who bought the one you're looking at.
Amazon's margin for a long time was rorting the tax system, something they enjoyed via federal regulatory capture. Their competitors were paying state and local taxes. They weren't.
One can legitimately argue that the system sucked or could have been done better but it is not exploitation in the sense of a glitch any more than handling moving by selling your furniture, mailing your small items, and then buying new stuff insread of renting a van since depreciation losses would be less than moving expenses.
Catalog precedent was what they used for taxes and even a large company using it to sell everything enmasse wasn't new either - Sears Catalog.
rort - verb - AUSTRALIAN/NZ
gerund or present participle: rorting
engage in sharp practice.
- [...]
- work (a system) to obtain the greatest benefit while remaining within the letter of the law.
At the time Amazon relied on huge 'subsidies' from the book publishers, they had huge trade debts, but the publishers couldn't afford to pull the plug as they'd loose that revenue
Now that they are on an equal footing and have to collect tax, Amazon's retailing isn't doing as good.
And were particularly bad at it for a long time. Selling books was the only thing keeping the company afloat during that span.
> They never have had a monopoly on websites that sell stuff to be delivered by mail, either.
Actually, they did on books. You seem like you may be young. In 1994-1996, credit cards were nowhere near as ubiquitous and certainly the online use of them was even less so. Online gift companies were still a big thing and not simply a given even into 1999-2000.
The big bookstores at the time all had physical presence. If they attempted to ship you book and not charge tax, some taxman was going to show up at their door. This stifled the development of the online websites for those companies.
Amazon had no presence that people could go after, so could skirt tax laws with far less danger. That gave them an in-built 5% advantage over everyone. And the small bookstores took it in the chin particularly hard.
The success of people like Bezos becoming huge by skirting the law is why we have people like Kalanick who thought they can become huge by skirting the law.
It wasn't at all obvious that Amazon would take over the world well into the 2000s. They looked like every other dotcom, particularly because they didn't consistently make GAAP profits and so people were just waiting for them to die. AWS, Kindle, Prime, Fresh, lots of stuff are recent developments.
Absolutely nothing about the original concept could have told you what it would become or was in any way exclusive.
You're forgetting that mail order wasn't the norm--even if you ordered from a catalog you picked it up in person at the store. So, not collecting tax on mail order wasn't a big deal until Amazon flattened bookstores with it.
Per FRED[1], monthly mail order sales doubled from 1992 to the end of 96.
Obviously it was nothing like today, but mail order was, like, a thing.
[1]: https://fred.stlouisfed.org/series/MRTSSM4541USS
*Also, I learned in my google rabbit hole about this that it’s a 1992 Supreme Court decision that confirmed that mail order retailers didn’t have to collect state tax unless they had a physical presence in the state.
Note that we are talking about small rural towns in the middle of nowhere. When sears started most of the population was either a farmer, or lived in a small town in farm country. If you lived in a large city you could go to a department store downtown and it would have everything. If you lived in a small town the department store had only the very popular items and you were expected to order from them.
By the 1980s the population had shifted to bigger cities, and UPS offered affordable shipping to your door, so those small town stores had little reason to exist and started closing.
I get that it feels neat and tidy to say that Amazon and Uber had the same growth model of skirting regulations, but the facts don't match that.
This doesn't mean that Amazon is good--I think that what the effect of what they've done to retail is awful. But using Uber as the key piece of a kind of Godwin's Law doesn't really help matters.
Wework does that via the private market, hence the game is up when it needs access to the public markets.
Amazon does that via AWS. AWS is the money that fuels the eCommerce side. The game will be up when:
1) Kubernetes will move AWS customers back to on-prem, or at least turn clouds into a commodity. Amazon knows that and this is the reason for the push toward lockin (aka lambda / serverless).
2) Amazon will be divided into two companies.
For almost all startups their app would run comfortably on a single dedicated server. This has been true for many, many years but only the YAGNI greybeards would go with it. Maybe two HA but even HA is overhyped, it's cheaper to be down. Down is part of this industry, you will be down in many circumstances anyways so perhaps don't chase a unicorn? Of course, above a certain size, two servers make sense but ... don't overdo it even then. You don't need microservices, you don't need containers. All of this is unnecessary hype. (And yes, both of you who works at a large enough company where being down is enough of a problem that it worths engineering about: good for you. I have architected a Top 100 website myself and we still didn't use more than a dozen servers and that included the staging infra.)
Gary Bernhardt of WAT fame from 2015 https://twitter.com/garybernhardt/status/600783770925420546?...
> Consulting service: you bring your big data problems to me, I say "your data set fits in RAM", you pay me $10,000 for saving you $500,000.
Very strongly related: a terabyte of RAM in just 16 modules so it fits most server boards is now under $5000 https://memory.net/product/p00926-b21-hp-1x-64gb-ddr4-2933-l...
Final shot, codinghorror of StackOverflow fame: https://twitter.com/codinghorror/status/347070841059692545
Overdoing the infra-HA-magic is bad, of course. But if you use containers, you can spin up dev envs faster, devs can just docker-compose (I still recommend Vagrant + docker, so devs can use whatever OS they like), and it helps with config management a bit too. (Much easier testing, deployment and upgrades.)
That said paying for AWS is the worst idea ever, it's so overpriced and the most used servie is EC2, which people could get anywhere else. (Sure, there are probably nice tricks that this pony can do, but there's probably a whole cottage industry trying to copy their niche offerings.)
I remember working for a company about a decade ago where we spent so much time engineering duplicate everything hardware or hot spares everywhere.
Guess what, when switch failed it didn't properly failed over. When router it started sending spurious packets everywhere and had to be taken down manually.
All the effort that went into duplicating hardware and making hot spares could have been save by just... having cold spares, and in the end the amount of downtime would have been the same, or less -- because when one thing fails it's really easy obvious where things stopped working.
In other words, like Yahoo getting a lot of their late-90's advertising from dot-com bubble companies that evaporated in 2001, AWS is massively exposed to the current bubble in "we have so much VC cash we don't know what to do with it" companies. When that goes away (i.e. the next downturn), AWS will lose a huge chunk of their business all at once. It will be interesting to see what Amazon's bottom line looks like at that point.
I also think that AWS did an excellent job locking its customers, so they cannot just "leave".
The real treat here is kubernetes. If I program to kubernetes , I can, in theory, move the workload from cloud to cloud, or move the workload from on prem to cloud.
This brings actual competition to the cloud space.
The problem is how to provide all the high-level services that AWS provide, and this will have to be taken by future startups which would extend kubernetes.
yahoo was at risk because the BULK of their ad business was ads for a budding industry that was hit hard. Normal boring enterprise was still selling buying ads elsewhere.