$ 160 billion – this is the number that the Amazon founder’s wealth is calculated at. His way can scarcely be repeated, but one can and should acquire from his misunderstandings and decisions. Seven years without earnings and analysts’ forecasts about approaching bankruptcy.
The emergence of Amazon.com
Jeff Bezos is acknowledged as one of the pioneers of e-commerce. In 1994, he left his position as vice president of a Wall Street company to start his own business. Leaving everything, he relocated to Seattle, where he began to develop his plan.
At that time, the annual growth of web projects was projected at the level of 2300%. Bezos compiled a list of 20 products that he could sell online. Later the list was reduced to 5 items: CDs, computer hardware, software, videos, and books.
Bezos was about to name his business Cadabra, but a lawyer convinced him not to do so – the word was consonant with the word cadaver (“corpse”). Finally, the entrepreneur is located on Amazon, in honor of the widest river in the world – therefore the original company logo.
Seattle became headquarters. It was easy to find technicians there, and there was a tremendous market for book distributors in neighboring Oregon. Bezos began raising money for the project while programmers started developing the company’s website.
How Jeff Bezos Works and Innovations
The site was launched with over a million titles in its database. Customers searched for books through the search box on the site, paid for the purchase with a credit card, and received it a few days later. Most of the orders were placed by wholesalers and publishers themselves, so the company did not even need a warehouse – Amazon.com received the book and immediately sent it to the client. A month later, a small company could already fulfill requests from 50 states.
Jeff Bezos was a pioneer to create the standards for online commerce. He was one of the first to develop a scheme for working with clients of all types. Bezos made sure that the books were always delivered in nice wrapping paper. And that customers could receive updates from the site and read the comments. He arranged to formulate a full-fledged community of customers who shared tips on his website. Over time, this model has become generally accepted – now, users of many stores are guided by product reviews when buying. But in the mid-1990s, it was an innovation.
Amazon.com is on the verge of collapse and the first profit in seven years
But behind the successful façade, there were huge losses. Despite the site already offering customers to buy furniture and kitchen utensils, the early 2000s were a tough time for Amazon.com. Many startups have filed for bankruptcy amid competition and a generally weakening economy.
Bezos remained optimistic and focused on cutting costs. In 2001, he laid off about 1,300 employees and closed the distribution shop. The company also reduced marketing costs and closed deals with retail chains. These measures resulted in sales exceeding $ 3 billion and, for the first time in its history, in the fourth quarter, Amazon.com posted a net profit of $ 5 million.
During the year, the businessman added one more direction – selling clothes through the website. In the fourth quarter of 2002, the company also reported profit, but already at $ 3 million.
Despite 7 years of experience, nearly $ 4 billion in sales, and an ambitious slogan: “The Biggest Choice on Earth,” the company still hasn’t promised long-term profits. In the following years, the company expanded its product line by selling sports equipment, jewelry, footwear, and many other product categories. Amazon.com has improved its payment system and also launched a special offer for students – free unlimited express delivery for a year for $ 79.
Bezos never stopped developing an online store. New deals and acquisitions resulted in $ 10 billion in sales in the early 2010s. Then the Amazon.com app was released, which increased store traffic. In 2012, 1% of all Internet traffic in North America went through Bezos’s site.
The entrepreneur himself gained fame as a tough and uncompromising leader. According to some reports, Bezos even hired an HR coach who helps him soften his tone with employees and reduce his emotional intensity.
It is believed that any unhappy customer can send an email directly to Bezos. It will be immediately forwarded to the employees of the company. Employees refer to the letter from Bezos with a question mark in the subject line as a “ticking bomb.” Very shortly, managers must prepare a response to the boss, which he will send to the customer. The businessman himself believes that such measures are necessary so that employees always hear the client’s voice.
The release of the Kindle e-books in 2007 seriously changed the landscape of the book business. The number of e-books has grown, and interest in print began to fall even faster. In 2011, the company introduced the Kindle Fire, a low-cost tablet computer. The following year, its sales accounted for half of all sold Android tablets.
In 2017, the company’s profit amounted to about $ 3 billion, and the number of employees worldwide exceeded half a million people. Jeff Bezos owns 16% of the company. He was several times included by Fortune magazine in the list of “50 Great Leaders in the World”, and since 2018 he has confidently settled in 1st place of the wealthiest personalities in the world.
In June 2018, his fortune was estimated at almost $ 140 billion, in September – already at $ 160. Bezos owns The Washington Post, which he acquired in 2013 for $ 250 million, and the space company Blue Origin. Besides, Jeff is a philanthropist, like his fellow billionaire Bill Gates. Bezos has donated $ 45 million to charity and continues to do so, sometimes consulting his Twitter followers.
