8 ms·

The pricing benefit really cannot be understated. Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble ma

The pricing benefit really cannot be understated. Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), where there were similar markdowns. And of course, you could get any book you wanted from Amazon. And then Amazon very quickly moved into media like CDs and DVDs. I used to order DVDs from various online retailers in the late 1990s and although Amazon wasn't my go-to in 1999/2000 (there were plenty of startups that sold at ridiculous losses and coupons that 16 year old me took advantage of), I appreciated their selection -- not to mention the gift certificates. I think a lot of us forget that Amazon wasn't the only big e-tailer in the late 90s, it's just the one that survived. There were lots and lots of bigger and smaller places that straight up went out of business after the .com crash, but Amazon, despite taking a massive beating, survived. Price was a huge reason for its success -- but I agree with others who point out that Sears and other incumbents had a chance to take them on, if not on price, than on selection and speed, way earlier than they did. Instead, many businesses chose to partner with Amazon (Borders, Toys R Us) for a time, to their ultimate detriment.

stinky613 8y ago
Very good points. I'd like to add that Amazon began in a time when the typical person didn't trust ANY online shopping options. To my recollection, Amazon and eBay were the two biggest players that found ways to give people confidence that they could safely shop online.
- filmgirlcw 8y ago
  YES! That's an excellent point too -- though I think this is where legacy retailers really lost out because I know my mom for example, was more comfortable giving her credit card to a known brand than some random website. My first order from Amazon was in 1997, when I was 14, and I did it using a gift card I got as a holiday gift from GeoCities (as thanks for being free tech support -- this truly is the most 1990s story ever), because my mom wouldn't hand over her credit card and I didn't get a Visa check card until I was 16. In 1996, Mom had been screwed over by phone reps for CompuServe's attempt at a true ISP stealing her credit card to order shit from Tiger Direct (told you this was a 1990s story) and was leery about anything online for years after that (and Tiger Direct was technically a mail-order catalog but it had a website). But you're right that eBay and Amazon were two of the earliest trusted, in part because they were the two biggest/first to market. (And also, both proved themselves to be trustworthy, which was important in the age of fly-by-night e-tailers). The same is true for PayPal.
- lscharen 8y ago
  Re: Trust; I always found it a bit ironic back in the late 90’s/early 00’s that people would not trust ordering things over the Internet, but happily call a mail-order number and give a complete stranger (and anyone within earshot) their name, address and credit card number.
  - rrdharan 8y ago
    Were they wrong though? I'd wager far more credit cards have been stolen via the internet than by eavesdropping?
    - spurcell93 8y ago
      Absolute numbers don't mean much in this context.
      - rrdharan 8y ago
        Why not? I’ll happily dictate my credit card number into my phone, heck I’ll throw open my apartment window and loudly yell my credit card number into the street, along with the expiration and CVV2, with zero fear that someone or something will actually be listening and recording it / writing it down. By contrast I refuse to send my credit card number in an email or post it on a non-SSL site. Guess which way I’ve only ever had my credit card number stolen?
  - ksec 8y ago
    Because the Phone Number, Mail-In Order Catalog and the Human Voice from other side of Phone are all Real World Interaction. With traces to be made that relate to Real World. On the internet Everything is virtual.
- ksec 8y ago
  >To my recollection, Amazon and eBay were the two biggest players that found ways to give people confidence that they could safely shop online. This so much. I remember people's fear of filling in their Credit Card info online. And people who thought sharing Uber with a Stranger would be a no no..... How time changes.
- devin 8y ago
  Great observation. I remember eBay and PayPal’s partnership being extremely important in making people feel protected. As I recall, there was well-advertised buyer protection by using them. Good feedback systems for buyers and sellers in both cases have proven a valuable asset.
ghaff 8y ago
>Amazon was 40% less than list for books Furthermore, it's easy to forget just how hard it could be to track down even an in-print book and how long it could take to actually get your hands on it. Some big city bookstores were better but, in many cases, (assuming the bookstore would special order books at all), it would basically be put into the next batch order from a publisher which might be a month or two.
- filmgirlcw 8y ago
  Yup -- I remember in college (in the early 2000s) how slow it could be for a bookstore to get a book in that a professor required for class (there was a book of poetry I literally could not find in the state of Georgia and my professor let me photocopy the work she had assigned until I could get my copy from Amazon b/c she recognized that I had literally called every single major and minor bookseller in Atlanta and the publisher and none could get me a delivery time ahead of Amazon, which was still going to be after our test) and by the time I graduated, most of us just reflexively went to Amazon rather than trying to fight over 6 copies Barnes & Noble or the college bookstores would manage to get in.
  - NikolaNovak 8y ago
    Which brings an unrelated point of how much understanding a typical university professor has for the idea that their course may not be the be-all-and-end-all of student's life. Making an unavailable book a requirement for a course? Ahh how much I don't miss those days of being at the mercy of every university prof or bureaucrat's whims :-)
    - dba7dba 8y ago
      Some profs just over ordered books. Some students bought books from other privately owned book stores across the street. Some students dropped out of class and hence did not buy books that were needed for 2nd half of the semester. Above reasons contributed to quite a bit of the books not getting sold. But yeah, I had to uncrate the dang books, and a few weeks later, crate the same books to ship back to publishers. I bet I'm one of the very few of the student body who learned how to work with Pallet trucks.
lallysingh 8y ago
Don't forget the reviews! Buying the right one is often more important than buying one today.
- JadeNB 8y ago
  > Don't forget the reviews! Buying the right one is often more important than buying one today. Amazon itself seems to have forgotten this; reviews used to be very useful, but either they're not trying very hard to combat fake reviews or they're not up to the challenge, because they're almost useless now for big-ticket items.
  - ascar 8y ago
    In my experience the reviews are most useless for small items, where fake reviews can easily manipulate the reviews or are even the only reviews available.
    - JadeNB 8y ago
      > In my experience the reviews are most useless for small items, where fake reviews can easily manipulate the reviews or are even the only reviews available. Yeah, 'big ticket' wasn't the right word; probably I meant 'commodity'. I meant to exclude things like reviews of obscure books, which sellers apparently usually don't bother trying to game, since they seem to be reasonably reliable (at least, last time I checked, which was a while ago …).
Yhippa 8y ago
In the late 90's and early 2000's Amazon was one of the few online retailers I actually trusted to buy things from. It sounds crazy now but the concept of ordering online was not nearly as consistent and as safe as it is now.
jlarocco 8y ago
I don't remember that big of a price advantage, but they definitely had a HUGE selection advantage compared to the book stores in my city. To a certain extent the price didn't matter much because it was the only way to buy a lot of books.
- acdha 8y ago
  If memory serves it usually wasn’t that dramatic but there were significant outliers where it was 50+% cheaper and I don’t think I ever saw it go significantly the other way so there was a strong inertial tendency to just buy it on Amazon rather than put time into shopping around. One other neat thing was international availability — Amazon.co.uk had Terry Pratchett books months ahead of the US release, so I could read them at the same time when people on Usenet were.
- Tsubasachan 8y ago
  Yeah a brick and mortar book store could never compete with an online retailer warehouse when it comes to selection. Eventually book stores started to create their own websites but by then it was too little too late.
  - filmgirlcw 8y ago
    Yup -- and some (Borders) made the strategic mistake to literally just use Amazon. When Borders finally broke off the relationship, not only was it too late [1], it was at literally the worst possible time it could have done it, from a business perspective -- given the financial crisis. Toys R Us did this too and as a result, never built a really solid e-commerce strategy. In fact, when Toys R Us left Amazon in 2006 (after years of litigation to get out of the contract) [2], it had the unenviable position of being behind from a tech perspective in a massive way. Not only that, the experience was considerably worse than it had been under Amazon. [1]: http://www.internetnews.com/ec-news/article.php/3749336/Borders+Breaks+Off+7Year+Amazon+Partnership.htm http://www.internetnews.com/ec-news/article.php/3749336/Bord... [2]: https://www.wsj.com/articles/SB113798030922653260 https://www.wsj.com/articles/SB113798030922653260
lebanon_tn 8y ago
I'm not well versed on the subject but I recently learned that Amazon's share of a book's purchase price is HUGE at around 40% (21.60 on a $54 book) I suppose the lesson is that there is a lot of value in being a distributor as I also know someone who is a part owner of a brewery and he says the same thing. Source: http://fabiensanglard.net/gebbdoom/ http://fabiensanglard.net/gebbdoom/
- hammock 8y ago
  That is the case at pretty much any retailer. Grocery stores, drug stores, clothing stores, etc.
  - johnmaguire2013 8y ago
    Don't forget app stores, music distributors, etc!
bsder 8y ago
> Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), where there were similar markdowns. This. But even for pure list, Amazon didn't pay sales tax so had a 5-8% advantage. Amazon killed all the technical bookstores in short order because of that pricing advantage that they didn't deserve.
johnvanommen 8y ago
> I think a lot of us forget that Amazon wasn't the only big e-tailer in the late 90s, it's just the one that survived. There were lots and lots of bigger and smaller places that straight up went out of business after the .com crash, but Amazon, despite taking a massive beating, survived. It's my opinion that The Dot Com Crash is what created Amazon. Here's how: I worked in Redmond Washington during the crash, and there were thousands of people who lost their jobs due to that. I knew so many people who were struggling to find work. This was Y2K, when Seattle wasn't the tech powerhouse it is today. T-Mobile didn't exist, Google hadn't opened any offices in Washington, and tech companies were failing left and right. I think that the crash gave Amazon an opportunity to hire people. There was a lot of talented people out of work. Arguably, this may also explain why T-Mobile has become so huge. I worked there before they were T-Mobile, and I can remember how tiny we were. You could fit our entire operations team into a conference room. Nowadays, T-Mobile is HUGE and I think a lot of that may be a combination of geography and timing. In 2003, Sprint was bigger than T-Mobile, but they're based in Kansas and the Seattle area just has a much larger pool of engineers to support a company like that.
dragonwriter 8y ago
> Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), The two main mall bookstore chains (Waldenbooks and B. Dalton) were, despite keeping their names, owned by and integrated with Borders and B&N respectively by the time Amazon existed.

stinky613 8y ago

Very good points. I'd like to add that Amazon began in a time when the typical person didn't trust ANY online shopping options. To my recollection, Amazon and eBay were the two biggest players that found ways to give people confidence that they could safely shop online.

filmgirlcw 8y ago
YES! That's an excellent point too -- though I think this is where legacy retailers really lost out because I know my mom for example, was more comfortable giving her credit card to a known brand than some random website. My first order from Amazon was in 1997, when I was 14, and I did it using a gift card I got as a holiday gift from GeoCities (as thanks for being free tech support -- this truly is the most 1990s story ever), because my mom wouldn't hand over her credit card and I didn't get a Visa check card until I was 16. In 1996, Mom had been screwed over by phone reps for CompuServe's attempt at a true ISP stealing her credit card to order shit from Tiger Direct (told you this was a 1990s story) and was leery about anything online for years after that (and Tiger Direct was technically a mail-order catalog but it had a website). But you're right that eBay and Amazon were two of the earliest trusted, in part because they were the two biggest/first to market. (And also, both proved themselves to be trustworthy, which was important in the age of fly-by-night e-tailers). The same is true for PayPal.
lscharen 8y ago
Re: Trust; I always found it a bit ironic back in the late 90’s/early 00’s that people would not trust ordering things over the Internet, but happily call a mail-order number and give a complete stranger (and anyone within earshot) their name, address and credit card number.
- rrdharan 8y ago
  Were they wrong though? I'd wager far more credit cards have been stolen via the internet than by eavesdropping?
  - spurcell93 8y ago
    Absolute numbers don't mean much in this context.
    - rrdharan 8y ago
      Why not? I’ll happily dictate my credit card number into my phone, heck I’ll throw open my apartment window and loudly yell my credit card number into the street, along with the expiration and CVV2, with zero fear that someone or something will actually be listening and recording it / writing it down. By contrast I refuse to send my credit card number in an email or post it on a non-SSL site. Guess which way I’ve only ever had my credit card number stolen?
- ksec 8y ago
  Because the Phone Number, Mail-In Order Catalog and the Human Voice from other side of Phone are all Real World Interaction. With traces to be made that relate to Real World. On the internet Everything is virtual.
ksec 8y ago
>To my recollection, Amazon and eBay were the two biggest players that found ways to give people confidence that they could safely shop online. This so much. I remember people's fear of filling in their Credit Card info online. And people who thought sharing Uber with a Stranger would be a no no..... How time changes.
devin 8y ago
Great observation. I remember eBay and PayPal’s partnership being extremely important in making people feel protected. As I recall, there was well-advertised buyer protection by using them. Good feedback systems for buyers and sellers in both cases have proven a valuable asset.

ghaff 8y ago

>Amazon was 40% less than list for books Furthermore, it's easy to forget just how hard it could be to track down even an in-print book and how long it could take to actually get your hands on it. Some big city bookstores were better but, in many cases, (assuming the bookstore would special order books at all), it would basically be put into the next batch order from a publisher which might be a month or two.

filmgirlcw 8y ago
Yup -- I remember in college (in the early 2000s) how slow it could be for a bookstore to get a book in that a professor required for class (there was a book of poetry I literally could not find in the state of Georgia and my professor let me photocopy the work she had assigned until I could get my copy from Amazon b/c she recognized that I had literally called every single major and minor bookseller in Atlanta and the publisher and none could get me a delivery time ahead of Amazon, which was still going to be after our test) and by the time I graduated, most of us just reflexively went to Amazon rather than trying to fight over 6 copies Barnes & Noble or the college bookstores would manage to get in.
- NikolaNovak 8y ago
  Which brings an unrelated point of how much understanding a typical university professor has for the idea that their course may not be the be-all-and-end-all of student's life. Making an unavailable book a requirement for a course? Ahh how much I don't miss those days of being at the mercy of every university prof or bureaucrat's whims :-)
  - dba7dba 8y ago
    Some profs just over ordered books. Some students bought books from other privately owned book stores across the street. Some students dropped out of class and hence did not buy books that were needed for 2nd half of the semester. Above reasons contributed to quite a bit of the books not getting sold. But yeah, I had to uncrate the dang books, and a few weeks later, crate the same books to ship back to publishers. I bet I'm one of the very few of the student body who learned how to work with Pallet trucks.

lallysingh 8y ago

Don't forget the reviews! Buying the right one is often more important than buying one today.

JadeNB 8y ago
> Don't forget the reviews! Buying the right one is often more important than buying one today. Amazon itself seems to have forgotten this; reviews used to be very useful, but either they're not trying very hard to combat fake reviews or they're not up to the challenge, because they're almost useless now for big-ticket items.
- ascar 8y ago
  In my experience the reviews are most useless for small items, where fake reviews can easily manipulate the reviews or are even the only reviews available.
  - JadeNB 8y ago
    > In my experience the reviews are most useless for small items, where fake reviews can easily manipulate the reviews or are even the only reviews available. Yeah, 'big ticket' wasn't the right word; probably I meant 'commodity'. I meant to exclude things like reviews of obscure books, which sellers apparently usually don't bother trying to game, since they seem to be reasonably reliable (at least, last time I checked, which was a while ago …).

Yhippa 8y ago

In the late 90's and early 2000's Amazon was one of the few online retailers I actually trusted to buy things from. It sounds crazy now but the concept of ordering online was not nearly as consistent and as safe as it is now.

jlarocco 8y ago

I don't remember that big of a price advantage, but they definitely had a HUGE selection advantage compared to the book stores in my city. To a certain extent the price didn't matter much because it was the only way to buy a lot of books.

acdha 8y ago
If memory serves it usually wasn’t that dramatic but there were significant outliers where it was 50+% cheaper and I don’t think I ever saw it go significantly the other way so there was a strong inertial tendency to just buy it on Amazon rather than put time into shopping around. One other neat thing was international availability — Amazon.co.uk had Terry Pratchett books months ahead of the US release, so I could read them at the same time when people on Usenet were.
Tsubasachan 8y ago
Yeah a brick and mortar book store could never compete with an online retailer warehouse when it comes to selection. Eventually book stores started to create their own websites but by then it was too little too late.
- filmgirlcw 8y ago
  Yup -- and some (Borders) made the strategic mistake to literally just use Amazon. When Borders finally broke off the relationship, not only was it too late [1], it was at literally the worst possible time it could have done it, from a business perspective -- given the financial crisis. Toys R Us did this too and as a result, never built a really solid e-commerce strategy. In fact, when Toys R Us left Amazon in 2006 (after years of litigation to get out of the contract) [2], it had the unenviable position of being behind from a tech perspective in a massive way. Not only that, the experience was considerably worse than it had been under Amazon. [1]: http://www.internetnews.com/ec-news/article.php/3749336/Borders+Breaks+Off+7Year+Amazon+Partnership.htm http://www.internetnews.com/ec-news/article.php/3749336/Bord... [2]: https://www.wsj.com/articles/SB113798030922653260 https://www.wsj.com/articles/SB113798030922653260

lebanon_tn 8y ago

I'm not well versed on the subject but I recently learned that Amazon's share of a book's purchase price is HUGE at around 40% (21.60 on a $54 book) I suppose the lesson is that there is a lot of value in being a distributor as I also know someone who is a part owner of a brewery and he says the same thing. Source: http://fabiensanglard.net/gebbdoom/ http://fabiensanglard.net/gebbdoom/

hammock 8y ago
That is the case at pretty much any retailer. Grocery stores, drug stores, clothing stores, etc.
- johnmaguire2013 8y ago
  Don't forget app stores, music distributors, etc!

bsder 8y ago

> Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), where there were similar markdowns. This. But even for pure list, Amazon didn't pay sales tax so had a 5-8% advantage. Amazon killed all the technical bookstores in short order because of that pricing advantage that they didn't deserve.

johnvanommen 8y ago

> I think a lot of us forget that Amazon wasn't the only big e-tailer in the late 90s, it's just the one that survived. There were lots and lots of bigger and smaller places that straight up went out of business after the .com crash, but Amazon, despite taking a massive beating, survived. It's my opinion that The Dot Com Crash is what created Amazon. Here's how: I worked in Redmond Washington during the crash, and there were thousands of people who lost their jobs due to that. I knew so many people who were struggling to find work. This was Y2K, when Seattle wasn't the tech powerhouse it is today. T-Mobile didn't exist, Google hadn't opened any offices in Washington, and tech companies were failing left and right. I think that the crash gave Amazon an opportunity to hire people. There was a lot of talented people out of work. Arguably, this may also explain why T-Mobile has become so huge. I worked there before they were T-Mobile, and I can remember how tiny we were. You could fit our entire operations team into a conference room. Nowadays, T-Mobile is HUGE and I think a lot of that may be a combination of geography and timing. In 2003, Sprint was bigger than T-Mobile, but they're based in Kansas and the Seattle area just has a much larger pool of engineers to support a company like that.

dragonwriter 8y ago

> Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), The two main mall bookstore chains (Waldenbooks and B. Dalton) were, despite keeping their names, owned by and integrated with Borders and B&N respectively by the time Amazon existed.