While driving home recently, I caught a news story on third quarter losses at Amazon.com. Although the street was well aware that negative numbers were looming, it was the first time that the web-based behemoth has a posted a loss since July 2003.
The losses were attributed to the company’s stake in online couponer LivingSocial, and continued investment in its Kindle distribution centers. Many analysts believe that despite the short-term losses, in the long term these expenses will only make the company stronger with better products and wider distribution channels.
As an Internet newbie back in the mid ‘90s during the dot com boom, I can remember when Amazon.com first appeared. The idea of actually finding books from the comfort of your home (or office) that you might never see stocked on the shelves of your local B. Dalton or Waldenbooks store was extremely appealing, as was the ability to search through a huge database of relevant information by author, genre and eventually based on others reviews and preferences.
It was such a simple idea, and it caught on very quickly.
As Amazon expanded into music and movies, I found myself toggling back and forth between All Music.com for the discography of a newly discovered band (like Neutral Milk Hotel) and then clicking over to Amazon to see if I could order that first album online.
Just a few years later, it seems everything from washing machines to pickaxes can be purchased with that one simple click. Along the way I have often wondered how long the e-growth at Amazon.com could last. Can a company like Amazon really be all things retail to all people? So far, the Amazon model defies most of the traditional business logic from the business world’s most respected (and outdated?) thinkers.
In his bestseller Good To Great, Jim Collins spends pages discussing the importance of a company finding and focusing on what it does best, or what it might be able to do better than any other company. Fifteen years ago, it was easy for me to believe that Amazon could one day be the greatest retailer of books and book related information in the world.
Today, Amazon defines its mission as: “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.”
“Anything”? Wow. Okay then.
One night I found myself in bed on my iPad, on Amazon.com researching the Godin Core P90 guitar, a competitor to the Gibson Les Paul and Les Paul Jr. Last week I purchased Princess Monoke, a famous Japanese anime film by famed director Hayao Miyazaki, for my sons from Amazon as well.
When trying to remember if it was Jim Collins or James Collins who wrote Good to Great for this blog post, I also went to — you guessed it — Amazon to check. The brand has become so pervasive in my life I can hardly imagine how inconvenient things would be without it.
The next morning, I discovered for the first time that industrial plumbing supplies are now available for contractors through Amazon. Rumor has it that the mammoth company is even considering starting its own delivery service to cut UPS and others out of its lucrative shipping and handling business.
The story is compelling. I’ll be watching closely over the next few years to see if Amazon can truly become “earth’s most customer-centric company.” In the meantime I’ll be browsing through its online aisles investigating my next purchase.