>> Hi there. Who are you? ≫>
I'm Jeff Bezos. ≫> And what is your
claim to fame? ≫> [laugh] I'm the
founder of Amazon. Com. ≫> Where did
you get an idea for Amazon. Com? ≫>
Well, three years ago, I was in New York
City, working for a quantitative hedge
fund. When I came across the startling
statistic that web usage was growing at
2300 percent a year. So I decided I would
try and find a business plan that made
sense in the context of that growth. And I
picked books as the first best product to
sell online for making a list of, like
twenty different products that you might
be able to sell. And books were great, as
the first best because books are
incredibly unusual in one respect, and
that is that there are more items in the
book category than there are items in any
other category by far. Music is number
two. There are about 200,000 active music
CDs at any given time. But in the book
space there are more than 3,000,000
different books worldwide, active and in
print in any given time across all
languages, more than one and a half
million in English alone. So when you have
that many items it literally build a store
online that couldn't exist any other way.
And that's important right now because the
web is still an infant technology.
Basically, right now, if you can do things
using a more traditional method, you
probably should do them using the more
traditional method. ≫> What kind of
inventory do you keep? ≫> We
inventory the best-selling books at any
given time worth inventorying in our own
warehouse, only a couple of thousand
titles. And then have, we do almost in
time inventory for another 400,000 titles
or so. We get those from a network of
electronic, we order, order electronically
from a network of wholesalers and
distributors. We order those today,
they're on our loading dock the next
morning. Then for another 1.1 million
titles, we get those directly form 25,000
different publishers, and those can take a
couple of weeks to get. And then the
there, there are million of out-of-print
books in our catalog. We have a catalog of
two one-half million books altogether.
Those million out-of-print books, some of
them we can get., some of them we can't.
But we find them if we can and then we
ship them to our customers. We do kind of
a search on those. ≫> What's the
almost-in-time inventory? ≫>
Almost-in-time inventory is the phrase we
use to describe the whole selection of, of
books that we offer. It's basically the
things that you know, below the 2000th
best selling book up to the 400,000th best
selling book. Those are the titles we can
get from a network of more than a dozen
different wholesalers. So if a customer
orders a book from us today, we order that
book from our wholesalers today and that
book shows up on our loading dock the next
morning. And then we can ship it to the
customer. ≫> They say one of the
toughest things to do on the internet is
to capture mindshare. What was your
secret? How did you do that? ≫>
Yeah, even more generally, I agree with
you that, you know capturing mindshare on
the internet is extremely difficult. You
know more generally, it's the late
twentieth century, not just the internet.
You know, capturing attention. Attention
is a scarce commodity of the late
twentieth century. And, we, one of the
ways that you can do that, and it's the
way that we did it, was by doing something
new and innovative for the first time that
actually has real value for the customer.
That's a hard thing to do. But if you do,
do that, then newspapers will write about
you, what you're doing. Customers will
tell other customers. And the, you'll get
a huge word of mouth fanout. And, and that
can really drive and accelerate
businesses. And that's what happened with
us. In the first year of opening
Amazon.com to the public we didn't do any
paid advertising and all of our growth was
fueled by word-of-mouth and media
exposure. ≫> I saw little ads at the
bottom of the column of the New York
Times. ≫> That was our very first
advertising. We don't do that any more but
at the very, at the very beginning we did
little tiny ads at the bottom of the front
page of the New York Times. ≫> I
thought that was very clever. It's sort of
using a URL as a macro because I, I read.
≫> And it expands. ≫> We're a
bookstore, click here. ≫> Right,
that's a great way to think of it.
≫> And it worked very well
apparently. ≫> I don't know, you
know. The problem with that kind of
advertising is it's extremely difficult to
track. ≫> Put a different URL for
every [laugh]. ≫> That's the
problem, you want people to start to learn
your URL. So you don't wanna actually use
a different one. And, it's very easy. One
of the great things about online ads. We
do advertising today in maybe 40
different, on, on different websites, we
do banner ads and that advertising is very
easy to track in terms of knowing how
effective it is. So we know, for each
piece of creative in each venue, not only
how many click throughs we get, but how
many sell throughs we get, how many
dollars of revenue it generates per ad
dollar spent on that creative and that
venue, and that is a sort of a marketer's,
you know, Nirvana in a certain sense.
≫> Well, it's an exciting place to
be on the web right now. ≫> Oh, it
absolutely is. I mean It's just
incredible. This is. What's really
incredible about this is that this is day
one, this is the very beginning, this is
the kitty hawk stage of electronic
commerce. We're moving forward in so many
different areas and lots of different
companies are as well. In the late
twentieth Century it's just a great time
to be alive. You know, we're gonna find
out that, I think, a millennium from now,
people are gonna look back and say, wow,
the late twentieth Century was really a
great time to be alive on this planet.