"Bezos basically wants to own the whole economy, right?"
"You think he will?" "I kinda think he will,
I kinda think that in like 10 years Jeff Bezos owns every single there is."
"Amazon's this trillion dollar tech company
closing 30% of our stores and malls and paying zero in taxes"
"How much of the internet do you run?" "It's a good question, um, it's a lot though".
When Jeff Bezos founded Amazon, he originally considered naming it Relentless,
and even registered the domain name Relentless.com which is still active to this day. However,
when friends told him the name sounded a bit sinister, he changed it.
Fast forward to present day, and Bezos is the richest man in modern history,
and has gone from being one man in an office to running a trillion dollar global empire.
And whilst the story of Bezos and Amazon is undeniably inspiring, the real question, is where
does this story end? Because now more than ever, the name Relentless seems like the perfect fit.
"Amazon is expanding its presence in the smart home market - the e-commerce
giant announced yesterday it has officially closed the deal to buy
the home security device company Ring. It's a reported 1 billion acquisition."
"Sold the Washington Post for 250 million dollars to Amazon founder and CEO, Jeff Bezos"
"Amazon announcing this week a very big move into the pharmacy business;
it sent shockwaves through the industry."
"One billion dollar acquisition of PillPack."
"Amazon making a big deal in the self-driving car
space. The price that Amazon paid was north of a billion dollars."
"Sold it to Amazon for over a billion dollars."
"Amazon is buying Wholefoods for nearly 14 billion dollars".
"It's time to go back to the moon, this time to stay".
Ok, let’s back up a little.
Amazon started from humble beginnings in 1994 selling books on the internet, and they even
used to ring a bell in the office every time they got a sale. But over the next couple of decades,
Amazon expanded into almost every product category there is, earning it the nickname
The Everything Store, with well over 350 million different products available to buy.
And when you think of Amazon this is probably what first comes to mind,
Amazon.com the online e-commerce giant.
However, the shopping component of Amazon is just a tiny fraction of what it does…
And sure, it’s normal for businesses to buy out competitors and enter new markets,
BUT, let’s just take a step back to see exactly how large Bezos’ Amazon empire
actually is, and what that could mean for our future.
For a start, they have Amazon Web Services, their computing & cloud services business that
essentially powers a huge portion of the entire internet, including Netflix, Twitch, Facebook,
Twitter --- and even the CIA. In fact, when AWS has a major outage, it can feel sorta like
‘the internet is down’, and even vacuums and doorbells on the AWS network can stop working.
Amazon has also entered the streaming service business,
buying the rights to not only many thousands of popular movies, tv shows, and live events,
but also creating their own originals. In fact, Amazon Studios became the first streaming service
to receive a Best Picture Oscar nomination for one of its original movies. And, with billions
more dollars reportedly due to be spent next year, it seems production will keep expanding.
And they aren’t just stopping at video streaming, they’re big players
in the music streaming space too, taking on the likes of Spotify and Apple Music.
Which fits very nicely with the fact that Amazon is also one of
the industry leaders in the smart speaker market.
And suddenly you start to realise the genius here in the way that so many of their products
and services interlink. If you become a member of their subscription service, Amazon Prime
you become part of the Amazon ecosystem - you probably buy a Fire stick to watch your Prime
video movies, which you can control with your Amazon Alexa,
which you bought from Amazon.com which runs on Amazon web services. There’s this synergy between
everything that means once you’re in, you’re unlikely to leave because everythings connected.
And this is just going to keep expanding; for example
they’ve announced plans for an online pharmacy with discount pharma prices available for prime
members. And as Amazon systematically tries to embed itself in almost every area of your life,
from managing your photos to delivering your groceries, it’s understandable some
people have concerns about the sheer amount of data Amazon are going to have on you.
But, the thing is, right now we’re just talking about some of the popular
consumer products and services under the Amazon label,
in terms of Amazon’s overall empire, we haven’t even begun to scratch the surface yet..
For example, Amazon are developing cutting edge AI facial recognition technology that they are
selling directly to law enforcement. Which on the one hand is helping police find criminals,
but on the other hand, is largely untested and unregulated, yet they’ve also had
talks about selling it to Immigrations and customs enforcement, and the US military.
And this isn’t Amazon’s first dealing in this area at all.
A BBC documentary about Amazon claimed that “Police have turned into Avon salespeople
for Amazon Ring”, a product which markets itself as a ‘smart video doorbell with a
built in Camera & WIFI’, that police are now recommending to people for security.
Amazon are also currently working on other futuristic projects like
drone deliveries and AI robots for the home.
Ironically, in 2018 a Guardian article wrote that: Of the top 10 US industries by GDP,
Amazon has a finger in all but real estate.’
In 2019, articles started popping up about Amazon entering real estate.
Even websites you may currently use yourself, like IMDB and GoodReads, are subsidiaries of amazon.
The thing is, Bezos has managed to brand Amazon in a way where no market is off limits for them,
in other words they have incredible brand elasticity, where Amazon can enter
any market and people will go ‘yeah, I guess that makes sense’.
For example, if other huge brands like Coca Cola or Samsung said they were opening physical
grocery stores it would be weird, but when Amazon say that, it’s not that surprising.
Which brings us onto Amazon’s plans to not just beat the high street,
but to become the high street. In case you haven’t seen,
Amazon is planning to reinvent the physical shopping experience too.
Likewise, when you hear Amazon are planning to launch more than 3,000 satellites into orbit to
supply the world with high-speed internet… that’s not surprising either. Same with their plans for a
3-million-square-foot air hub for the fleets of planes they’ve been buying. Or their purchase
of self-driving car company, Zoox. Again, whilst these big projects all seem unrelated,
you can also see how these different pieces may all later connect together,
for example driverless vehicles delivering your Amazon packages.
Because vertical integration is definitely at the heart of Amazon’s success - they essentially
want to own the whole supply chain; they want to make the products themselves,
store the products themselves, sell the products through their own platform, accept payment with
their own payment gateway, and then deliver the products with their own delivery teams.
And I just want to be clear that from a customer perspective I love Amazon,
I think what they’re doing is exciting, and I obviously don’t actually think
Bezos is some kind of supervillain even if he does look a bit like one,
but, I do think it’s easy to see why there is some concern about Bezos entering so many
different markets, given the incredible amount of resources he and Amazon have.
And no, currently they don’t match the definition of a monopoly in any of the markets they’re in
because they still have plenty of competition. In fact, Amazon’s competition is... almost everyone.
However, what some people think is the problem, is that so many of their own competitors
depend on Amazon. A lot of their competitors use Amazon Web Services, or sell through Amazon.com’s
third party seller marketplace. And whilst they technically have the choice to do that,
let’s look at an example. Many book publishers have had negotiations with Amazon
over e-book pricing, to which Amazon can essentially dictate the price they want,
because if the publishers don’t agree, Amazon can simply stop showing the books from that publisher,
causing their sales to tank since most people buy books from amazon.
Likewise with individuals selling their own products through Amazon,
many have reported that if they find a hit product that’s selling well, Amazon will
simply create their own version of the product, and show it higher up in search results. And if
the original seller lowers their prices to try and compete, Amazon will just lower their price too.
In fact, for many years Amazon prioritized growth over profit, and have a track record
of temporarily making a loss on items in order to be cheaper than competitors,
so competitors go out of business, and then amazon can re-raise their prices if they want.
And whilst this can be harsh, it’s nothing new; some economists may say it’s simply good business,
but others may say that Amazon being both a platform
and a retailer that sells through that same platform is a dangerous conflict of interests,
and that the anti-competitive tactics used by Amazon are cause for concern.
And of course, given Amazon’s seemingly infinite resources and connections,
it’s not exactly unrealistic to imagine Amazon’s dominance in almost every market
growing and growing, until Jeff Bezos essentially wins capitalism.
So you could argue, Amazon’s biggest competition and threat is probably the government,
and some senior figures are already raising big concerns about Amazon’s dominance.
Technically Amazon don’t violate any antitrust laws right now,
but that’s partly because their tactics hurt other businesses, not customers. In fact,
Amazon’s leverage over competitors is mostly leading to lower prices for the end consumer.
So it raises the interesting question of whether Amazon’s continued growth is a good thing?
Some people would say if amazon keep innovating, keep lowering prices,
keep improving delivery speeds, then that’s what matters. After all,
they are renowned for incredible customer service and putting the consumer first.
But some other people would say, at what cost? Are their employees treated fairly to achieve
those great results? And if independent stores can’t compete does that hurt our communities
and small business owners? Especially when you consider Amazon get massive tax breaks
for many of their innovative programmes, which small businesses simply can’t compete with.
Likewise, some people argue that the vast amount of data Amazon have on everyone from all these
different companies and products they have, allows them to understand consumers in a way
most companies simply can’t, which will allow Amazon to continually stay ahead of the game.
And finally, in even more extreme cases,
some people would argue we should all be wary of trusting Amazon.
More than half of all sales on Amazon’s main shopping site come from third-party sellers
who send their items into Amazon, and Amazon handle the rest because of their incredible
infrastructure. But, Amazon’s terms and conditions state ‘third party sellers are responsible for the
safety of these items, not Amazon themselves’, and this concerns some people because a lot of
these third-party sellers are not established businesses, they're just random individuals
trying to make some money on the side. And so if they send in counterfeit or faulty items,
it’s entirely possible they will get mixed in with genuine items in Amazon warehouses,
and so you’re never fully sure who provided the item you’re buying, and whether it’s authentic.
And again, I would just like to stress I buy from Amazon regularly
and don’t mean this as an attack on Amazon, but I do think all of this
is interesting to consider… if Amazon is going to have so much control and power,
do they also need more responsibility? I’d be curious to hear your thoughts in the comments.
However, for me personally, the final and most interesting question of all
is what is Jeff Bezos’ end game? Admittedly, most of his wealth is currently tied up in shares,
but there’s still no question that he has more money than anyone could ever spend in a lifetime,
and yet he continues to work incredibly hard, and shows no signs of slowing down
at all. I think it’s clear Bezos wants to keep expanding into even more industries,
and keep buying out even more companies. In other words, he wants to stay relentless.
And this has actually led to him coming under a lot of scrutiny recently, especially as he doesn’t
seem to give as much of his money away to charity as some might expect. So you start to wonder,
what is he going to do with all that wealth and power? And this could be the answer...
Even from just 5 years old, Bezos says he’s been fascinated by the idea of space travel, and so is
spending an increasing amount of time and money on his space company Blue Origin. According to
their website, they say “we must go to space to tap its unlimited resources and energy.”
And so you start to think that perhaps world domination
is not the end goal for Jeff Bezos, at least, not this world…
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until then, thank you so much for watching, you are a legend, I’ll see you next time!
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