[Overview]
Amazon.com was a "pioneer" online bookstore that created an entirely
new economic model. Amazon.com was launched by Jeff Bezos in July 1995,
in Seattle, on the west coast of the U.S., after a market study which
led him to conclude that books were the best products to sell on the
internet. When Amazon.com started, it had 10 employees and a catalog of
3 million books. Unlike traditional bookstores, Amazon.com didn't have
windows looking out on the street and books skillfully lined up on
shelves or piled upon displays. The virtual window is its website, with
all transactions made through the internet. Books are stored in huge
storage facilities before being put into boxes and sent by mail. In
November 2000, Amazon.com had 7,500 employees, a catalog of 28 million
items, 23 million clients worldwide and four subsidiaries in UK (in
August 1998), in Germany (in August 1998), in France (August 2000) and
in Japan (October 2000). A fifth subsidiary opened in Canada in June
2002. A sixth subsidiary - named Joyo - opened in China in September
2004.
[In Depth (published in 1999)]
Jeff Bezos launched Amazon.com in July 1995, after a market study which
led him to conclude that books were the best products to sell on the
internet.
In Spring 1994, he drew up a list of twenty products that could be sold
online, ranging from clothing to gardening tools, and then researched
the top five, which were CDs, videos, computer hardware, computer
software, and books.
"I used a whole bunch of criteria to evaluate the potential of each
product, but among the main criteria was the size of the relative
markets. Books, I found out, were an $82 billion market worldwide. The
price point was another major criterion: I wanted a low-priced product.
I reasoned that since this was the first purchase many people would
make online, it had to be non-threatening in size. A third criterion
was the range of choice: there were 3 million items in the book
category and only a tenth of that in CDs, for example. This was
important because the wider the choice, the more the organizing and
selection capabilities of the computer could be put in good use."
(excerpt from the Amazon.com press kit)
In 1998, Amazon.com was offering 3 million books, CDs, audio books,
DVDs, computer games - more than 14 times as many titles as the large
chain superstores - to 3 million people in 160 countries. "Businesses
can do things on the web that simply cannot be done any other way",
wrote Jeff Bezos. "We are changing the way people buy books and music."
Amazon.com quickly became the largest online bookstore, with a catalog
of these 3 million items that could be ordered online, authoritative
reviews, author interviews, excerpts, customer reviews, and book
recommendations. As an internet retailer, Amazon.com could offer more
services than traditional retailers: lower prices, larger selection,
and a wealth of product information.
Any book lover could post his own reviews of books on Amazon's website,
and read others. He could read many interviews with authors, and a
number of blurbs and excerpts from books. He could search for books by
author, subject, title, ISBN or publication date. Prices were
discounted, with savings of 20-40% on 400,000 titles (40% on selected
feature books, 30% on hardcovers, and 20% on paperbacks). The client
usually received the books within a week. If he requested it, he could
receive an email announcing a new book by a favorite author or a new
book on a favorite topic. He could select some book categories (44
listed), to be sent a monthly review of new books by email. All things
that were entirely new at the time.
What we take for granted now, i.e. buy a book in Europe from the US
site of Amazon.com, or buy a book in the US from the German site of
Amazon.de, was making big waves at the time, first as "unfair
competition" with the local online bookstores, then for taxation. A
first outline agreement was concluded between the US and the European
Union in December 1997, and this agreement was followed by an
international convention. The internet was decided a free trade area,
i.e. without any custom taxes for software, films and electronic books
bought online. Material goods (books, CDs, DVDs, and so on) and
services were subject to existing regulations, with collection of the
VAT for example, but with no additional custom taxes.
Amazon.com and others had great assets, but there were bad news for
small bookstores. Like the small bookstore set up in 1971 by my friend
Catherine Domain in central Paris, on the island Ile Saint-Louis,
surrounded by the Seine river.
The small Ulysses Bookstore is known as the oldest travel bookstore in
the world. It has more than 20,000 books, maps and magazines, out of
print and new, in a number of languages, about any country and any kind
of travel, all packed up in a tiny space. Catherine has been a
traveller since she was a child. She travels every summer - usually
sailing - while her boyfriend runs the bookstore. She is also a member
of the French National Union of Antiquarian and Modern Bookstores
(SLAM), the Explorers' Club and the International Club of Long-Distance
Travellers.
Catherine visited 140 countries, where she sometimes had a hard time.
But one of her most difficult challenges was to set up a website on her
own, from scratch, without knowing anything about computers. Catherine
wrote in December 1999: "My site is still pretty basic and under
construction. Like my bookstore, it is a place to meet people before
being a place of business. The internet is a pain in the neck, takes a
lot of my time and I earn hardly any money from it, but that doesn't
worry me..." Nevertheless, despite the internet, she was pessimistic
about the future. "I am very pessimistic, because the internet is
killing off specialist bookstores."