It doesn't matter to
me whether we're a
pure internet play. What
matters to me is
do we provide
the best customer service.
Internet Shminternet
Given the decades of
wisdom that has built up
in the business
world investors, it sounds
like you're saying
you're making a big
speculative bet, if
they're investing in
your company's stock.
Well I think all
Internet companies you
know the stocks are
incredibly volatile...
But even long term.
Long term
I believe. That
it's very easy to
predict that there are
going to be
lots of successful companies
born of the Internet.
They're going to have
very large market caps
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.com
if 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 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 P.C.
revolution in 1980 you
wouldn't have predicted
the five winners the
five biggest winners.
There've been lots of
winners actually. So this
space is a little
different and brand name
may need may mean
more and then
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. 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 you keep
in stock. You've got
thousands and thousands
of employees now.
We have over 3000
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, End to
end. And that's what
those
distribution centers.
But you're not
a pure Internet play.
It doesn't. It doesn't
matter to me whether
we're a pure Internet
play it matters to me
is we provide
the best customer service.
Internet Shminternet. It's
that's you know
that doesn't matter.
Well but it does
matter to your investors to
know whether they're
investing in a company
that is...
No, 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.
I don't see why not.
I think they should make
that argument. So
it's a correct argument.
OK.
So you'll open as
many square feet of space
physical space as 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
cost 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 square 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 of of of retail
stores to half
a dozen distribution centers.
It's just not you
know it's bad math.
Either way whichever side
of the argument you
believe you're making what
it 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 you're
opening a 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 two that
you can make money by
selling vast volumes
of products and
essentially razor
thin profit margins.
I think that the
the first one in particular
I agree with
wholeheartedly which is that
where
There 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
less risky of the two
approaches because scale
is important in
this business. And 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 going to 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 do 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 and
become the best in
those businesses and the
market leader in
those businesses. There are
other companies that
have been running these
types of businesses for
decades if not more.
I don't think so. So
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 what we really
cared about customers and
now we know a lot
about books 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.
