Podcast

Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 176 16 mins

Jeff Bezos in 1999 Sharing the 5 Core Tenets behind Amazon’s Success

Posted on 21st February 2019 ,
by Kunle Campbell


About the guests

Kunle Campbell

Kunle Campbell

Kunle advice and helps direct-to-consumer retail brands profitably acquire customers through paid media, conversion optimization, and search marketing.
He is also sometimes referred to as ’the ecommerce traffic and conversions guy’.
Kunle hosts the 2X eCommerce Podcast, a top charting podcast on iTunes business and marketing categories.



On this episode, I cover the five core tenets of Amazon’s success. This is actually based on an interview with Jeff Bezos’ in 1999. Here is the video:

 

At the time he said that he believed that Amazon’s long-term success relied on focusing obsessively enough on:

  1. Customer experience
  2. Product selection
  3. Ease of use – Digital and Physical User Experiences
  4. Low prices
  5. More information to make purchase decisions

“If there’s one thing Amazon.com is about, its obsessive attention to the customer experience”

“What matters to me is do we provide the best customer service” 

“internet from smitchernet”

“In the long term, there is never any misalignment between customer interests and shareholder interests”

– – –

Timestamps

3:49 Guiding principles to Amazon’s success
15:10 Amazon in 1999
6:10 Interview with Jeff Bezos
12:27 The secret
13:30 Why is product selection important

SPONSORS:

This episode is brought to you by:

Klaviyo

Klaviyo
If you’re looking to grow your business there is only one way—by building real, quality, customer relationships. Most marketing software will claim they do this, but will never deliver on their promises. You need to demand more from your marketing software that’s where Klaviyo comes in. Klaviyo helps you build meaningful customer relationships by listening and understanding cues from your customers, allowing you to easily turn that information into valuable marketing messages.
That’s why 10,000 innovative brands have switched to Klaviyo.
What’s their secret to building customer relationships? Tune into Klaviyo’s Beyond Black Friday docu-series to find out and unlock marketing strategies you can use to keep momentum going year-round. Just head on over to klaviyo.com/beyondbf for more.


Transcript

It doesn't matter to me whether we're a peer internet play what matters to me is to be provide the best customer service internet internet given the decades of wisdom that has built up in the business world investors
it sounds like you're saying are making a big speculative bet if they’re investing in your company so well I think all internet companies you know the vault the stocks are incredibly volatile and I've you know even long-term it long-term I believe that it's very easy to predict that there
gonna be lots of successful companies born of the internet they're gonna have very large market caps and and so on I also believe that today where we sit it's very hard to predict who those companies are going to be so you know you can make bets on these things and I think that Amazon account we don't if we're not one of those important lasting companies born of the Internet we will have nobody to blame but ourselves and that we will be extremely disappointed in ourselves but there are no guarantees it's very very hard to predict if you go back and look at the companies created by the PC revolution in 1980 you probably wouldn't have predicted the five winners you know the five biggest winners there's been lots of winners actually so this space is a little different and brand name may need may mean more and there's some increasing returns kinds of things maybe more but I believe that if you can focus obsessively enough on customer experience selection ease of use low
prices more information to make purchase decisions with if you can give customers all that plus great customer service and with our toys and electronics we have a 30 day return policy if you can do all of that then I think you have a good
chance and that's what we're trying to do you're not really a pure Internet company anymore either re I mean you've got millions of square feet now of real estate you've got a growing huge and growing inventory of items with we do whatever you've got thousands and thousands of employees now yeah we have over 3,000 employees and over four million square feet of distribution center space and those are things I'm very very proud of because with that distribution center space and half a dozen distribution centers around the country it allows us to get product close to customers so that we can ship it to customers in a very timely way which improves customer service levels that's what we're about if there's one thing amazon.com is about its obsessive attention to the customer experience into end and that's what those distributions are you're not appear in turning-point it does it doesn't matter to me whether we're a peer internet play what matters to me is do we provide the best customer service internet from internet it's that's that you know that doesn't matter well but it does matter to your investors to know whether they're investing in a company that I know they should be investing in a company that obsesses over customer experience in the long term there is never any misalignment between customer interests and shareholder interests well that's the same argument that somebody at Walmart would make as well wouldn't it I don't see why not I'd think they should make that argument so it's a correct argument okay so you'll open as many square feet of space physical spaces you have to hire as many employees as you have to to service customers absolutely and we'll do it as rapidly as we can that's a very costs intense proposition not compared to opening an equivalent network of retail stores so if you open a bunch of chain stores look when we open a distribution center we're opening places that may have squit you know where we may pay 30 cents a square foot for for a lease instead of paying seven dollars a square foot which you might pay in a high-traffic retail area so when you compare those things they're not the same you can't compare a big chain of retail stores to half a dozen distribution centers it's just not you know it's bad math okay either way whichever side of the argument you believe you're making what seems to me there's only one side which is obsess over customers but it seems to me that both with the speed of your growth in terms of the number of stores online that you're opening the different businesses you're getting into the number of distribution centers and your opening and new employees you're hiring that you are making an intense gamble here which is twofold one that you can run this number of businesses different businesses well and and two that you can make money by selling vast volumes of products at essentially razor-thin profit margins I think that the the first one in particular I agree with wholeheartedly which is that where there's no guarantee that amazon.com can be a successful company what we're trying to do is very complicated there's huge execution risk involved we have a terribly complicated business we're growing you know historically very rapidly we're opening new product categories we're expanding in new geographies we have whole new business models with things like auctions now we think this is the last risky of the two approaches because scale is important in this business and and it you need scale also to offer the lowest prices and the best customer service to people so scale is important to us and we're gonna go after that kind of scale but it does mean that the executional challenges are huge and so you'll find a bunch of people back in Seattle and around the world working very hard to make sure we service customers at the level that they're used to and then even improving that isn't it to some extent a certain amount of with all due respect corporate arrogance to assume that you can come into these businesses which you have no experience in and virtually overnight enter a huge variety of different businesses become the best in those businesses and the market leader in those businesses I don't think I know there's other companies that have been running these types of businesses for decades if not more I don't think so so the the you know when we first started selling books four years ago we were everybody said look you're just computer guys you don't know anything about selling books and that was true but we but we really cared about customers and now we know a lot about ebooks and when we first started selling music people said the same thing but we hired the right people so we don't do this in a vacuum we go out and hire the best industry experts in each of these categories that's the same with toys electronics so you know we take this very seriously we take the commitment to the customer very seriously and we're not about to release something or announce something before it's ready you

About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

Learn from eCommerce Entrepreneurs & Marketing Experts


Get Free Email Updates by Signing Up Below:

Podcasts you might like