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.