[Summary]
Jeff Bezos launched Amazon.com in July 1995 in Seattle, on the West
Coast, after a market study which led him to conclude that books were
the best products to sell on the internet. The online bookstore started
with 10 employees and a catalog of 3 million books. Unlike traditional
bookstores, Amazon's windows were its webpages, with transactions made
through the internet. Books were stored in huge storage facilities
before being put into boxes and sent by mail. In November 2000, Amazon
had 7,500 employees, a catalog of 28 million items, 23 million clients
worldwide and four subsidiaries in United Kingdom (launched in August
1998), Germany (August 1998), France (August 2000), and Japan (November
2000). A fifth subsidiary opened in Canada in June 2002. A sixth
subsidiary, named Joyo, opened in China in September 2004. In July
2005, for its 10th anniversary, Amazon had 41 million clients and 9,000
employees.
***
Jeff Bezos launched Amazon.com in July 1995 in Seattle, on the West
Coast, after a market study which led him to conclude that books were
the best products to sell on the internet.
The online bookstore started with 10 employees and a catalog of 3
million books, i.e. the catalog of books available for sale in the U.S.
Unlike traditional bookstores, Amazon’s windows were its webpages, with
transactions made through the internet. Books were stored in huge
storage facilities before being put into boxes and sent by mail.
What exactly was the idea behind Amazon.com? In spring 1994, Jeff Bezos
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.
As recalled by Jeff Bezos in 1997 in Amazon's press kit: "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."
In the wake of the Internet Bookstore in United Kingdom, that was the
largest online bookstore in Europe, Amazon.com launched is own
Associates Program in spring 1997. There were 30,000 associates in
spring 1998, and 60,000 associates in June 1998.
As stated in a press release dated 8 June 1998 to promote the program:
"The Amazon.com Associates Program allows website owners to easily
participate in hassle-free electronic commerce by recommending books on
their site and referring visitors to Amazon.com. In return,
participants earn referral fees of up to 15 percent of the sales they
generate. Amazon.com handles the secure online ordering, customer
service, and shipping and sends weekly email sales reports. Enrollment
in the program is free, and participants can be up and running the same
day. Associates range from large and small businesses to nonprofits,
authors, publishers, personal home pages, and more. The popularity of
the program is reflected in the range of additions to the Associates
Community in the past few months: Adobe, InfoBeat, Kemper Funds, PR
Newswire, Travelocity, Virtual Vineyards, and Xoom."
People could search Amazon’s online catalog by author, title, subject,
date or ISBN. The website offered excerpts from books, book reviews,
customer reviews, and author interviews. People could "leaf" through
extracts and reviews, order some books online, and pay with their
credit card. Books arrived within a week at their doorstep. As an
online retailer, Amazon could offer lower prices than local bookstores,
a larger selection, and a wealth of product information. Customers
could subscribe to a mailing list to get reviews of new books by their
favorite authors, or new books in their favorite topics, with 44 topics
to choose from. In 1998, Amazon was also selling CDs, DVDs, audio books
and computer games, with 3 million clients in 160 countries.
Amazon’s main competitor was the online bookstore of Barnes & Noble, a
major bookseller with 481 stores nationwide in 1997, in 48 states out
of 50, as well as 520 B. Dalton stores in shopping malls. Barnes &
Noble first launched its America OnLine (AOL) website in March 1997, as
the exclusive bookseller for the 12 million AOL customers, before
launching its own website barnesandnoble.com in May 1997 in partnership
with Bertelsmann (Barnes & Noble bought Bertelsmann’s portion (36,8%)
back for 164 million dollars in July 2003).
Barnes & Noble’s site offered significant discounts: 30% off all in-
stock hardcovers, 20% off all in-stock paperbacks, 40% off select
titles, and up to 90% off bargain books. Its Affiliate Network spread
quickly, with 12,000 affiliate websites in May 1998, including CNN
Interactive, Lycos and ZDNet. One year later, Barnes & Noble.com
launched a revamped website with a better design, an Express Lane one-
click ordering, improved book search capabilities, and a new software
"superstore". A fierce price war began with Amazon for the best book
discounts, and Amazon.com came to be known as Amazon.toast, which
didn’t last. With a two-year head start, Amazon stayed ahead in the
competition.
Amazon launched its eBookStore in November 2000, three months after
Barnes & Noble, after partnering in August 2000 with Microsoft to sell
ebooks for the Microsoft Reader, and with Adobe to offer ebooks for the
Acrobat Reader and the Glassbook Reader -- Adobe had just bought
Glassbook, its reader and its digital bookstore. In April 2001,
Amazon.com partnered again with Adobe to include 2,000 copyrighted
books for the Acrobat eBook Reader, mainly titles from major
publishers, travel guides and children books.
In November 2000, Amazon had 7,500 employees, a catalog of 28 million
items, 23 million clients worldwide and four subsidiaries in United
Kingdom (launched in August 1998), Germany (August 1998), France
(August 2000) and Japan (November 2000). A fifth subsidiary opened in
Canada in June 2002, and a sixth subsidiary, named Joyo, opened in
China in September 2004. In July 2005, for its 10th anniversary, Amazon
had 9,000 employees and 41 million clients.