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I've recently been reading through the Amazon letters to shareholders [https://ir.aboutamazon.com/annual-reports/ https://ir.aboutamazon.com/annual-reports/].

by GlennS 7y ago

I've recently been reading through the Amazon letters to shareholders [https://ir.aboutamazon.com/annual-reports/ https://ir.aboutamazon.com/annual-reports/]. It's clear from those letters that Amazon is not an experiment, but rather a flawlessly executed plan about how an online retailer can exploit their inherently better capital flows to grow very quickly. It's almost the opposite of the modern startup approach. Not: "We need to borrow money and take investment to get big and dominate the market". Instead: "If we drive our costs down and focus on fast fullfillment or orders/inventory turnover, we'll have all this spare money sloshing around to reinvest, and happy local customers. Therefore we can't help but get big.". (There's a lot more to it than this.) The first letter shows that they already understood the economics of web retail very well in 1997! Accusing them of lacking pride is also definitely missing the mark. Amazon are optimizing customer satisfaction and rate of fullfillment. They enter all these other markets exactly because they are proud enough to believe they'll win. Amazon wouldn't enter a market aiming to be 2nd best. I haven't gotten to the present yet, so I didn't know that Amazon had opened high-street retail shops. The earlier letters said that they wouldn't do that unless they figured out how to make it scale faster than their expenditures, like their online business.

jcims 7y ago
>Amazon are optimizing customer satisfaction and rate of fullfillment. This isn’t just a byproduct of high speed/low drag commerce, they intentionally and aggressively focus on and invest in customer satisfaction. Anecdotally and most certainly with exception in this very audience they are easily in my top three if not GOAT for direct human to human empathetic and effective customer service. Google in comparison leaves me feeling like I’m twisting random knobs on someone else’s lab project.
- PakG1 7y ago
  Looking at this now, it's amazing to compare with the public criticism that Werner Vogels gave to the face of the corporate blogging movement back in 2006. https://www.allthingsdistributed.com/2006/03/naked_answers.html https://www.allthingsdistributed.com/2006/03/naked_answers.h... Back then when he claimed that Amazon did a very good job of being customer focused, I was thinking: maybe, but whatever, I'm not sure what's special about their customer experience compared to others. Today, I'm thinking: wow, now that's a real example of audacious vision both executed and realized.
  - BryantD 7y ago
    The Scoble post he linked to in the above is now located here: https://scobleizer.blog/2006/03/30/three-audiences-three-different-cultures/ https://scobleizer.blog/2006/03/30/three-audiences-three-dif...
  - ajaynv87 7y ago
    On a tangent, I recently interviewed with amazon and you can tell everyone’s being pushed to go to great lengths when it comes to customer satisfaction. The interview really gave me a sense of what amazons thinking when they give you a 25 dollar discount when you call them about a delayed delivery on a 30 dollar item. From the outside looking in, you think they are crazy but when you’ve seen the organizational obsession with customer satisfaction, it all makes complete sense.
- andyrichardson 7y ago
  You're 100% right. Look at #1 of their leadership principles https://www.amazon.jobs/en-gb/principles https://www.amazon.jobs/en-gb/principles As a customer and as a former interviewee, their motives were always very clear.
  - mcny 7y ago
    It is so easy to say that customers are our number one priority but I realized Amazon.com was different when my team was implementing gift cards at a smaller (still subsidiary of a public) company (not Amazon). The question was simple: why do gift cards have to expire? The answer that nobody wanted to say: because we don't want to leave money on the table. It was a frustrating exercise in futility as the customer priority took a back seat at the first sign of decreased liability/free money. Also we would cancel orders for relatively minor pricing mistakes where I believed we should have ate those costs as a teachable moment. On the other end though, as a customer I'm more scared of Amazon than walmart. As an Amazon.com customer, I consciously avoid returning unless I absolutely have to because I care about my account. I fear amazon will honor my ridiculous requests to a point and ban me at some point. I (unsuccessfully) tried to return an air mattress to Walmart after a week of use because it didn't hold air perfectly (they never do). I don't fear being banned by Walmart.
    - katbyte 7y ago
      > As an Amazon.com customer, I consciously avoid returning unless I absolutely have to because I care about my account. I fear amazon will honor my ridiculous requests to a point and ban me at some point From my experience i've had the opposite approach. Anything that doesn't live up to my standards or simply doesn't work out i return. I return ruthlessly and i've never had any problems. However my rate of return is still less than 1 in 20 and i purchase a fair amount. I've never heard of anyone being banned for returning items on amazon?
      - eropple 7y ago
        I've heard of people getting banned for repeatedly buying and returning high value items. I have a video studio and while building it out I was going through a lot of returns of items that just didn't live up to their product pages' claims. As I was nervous about getting canceled I made sure to call Amazon and the CS rep put a note in my file about why I had a high (like 10%, but of relatively expensive stuff) return rate. She told me she gets asked to do that once in awhile and that she'd never heard of problems once somebody had done that.
- BryantD 7y ago
  This is absolutely true -- Amazon sets a high bar for customer service when it comes to returns, making things right, etc. And yet there's this problem with fraud! Counterfeit products, Kindle Unlimited scammers, etc. I'm not totally sure how to reconcile the two. Possibly it's that the customer service mentality is very strong in the group that's responsible for saying "yes, you can return that" but not as strong in the engineering/product teams in retail? (AWS is functionally a different organization than retail, which is probably worth remembering for these discussions.)
- BeetleB 7y ago
  I keep hearing that Amazon is "customer obsessed", and I wonder who these happy customers are. Their web site design leaves much to be desired. And it's heavy. Before I upgraded my PC, I dreaded opening a few Amazon tabs - it would bring my PC to a crawl. No other retailer had this problem. In the old days, with a single click, I could go to the Reviews page. Now the product page has no immediate click to the Reviews - I have to scroll down and click on it. Clicking the link on the top just takes me to the shorter review at the end of the page (and I have to scroll again to get to See All Reviews). When I write a review, I have no way (that I know of) to get notified of comments to my review. If there's an option for it, do let me know. I just checked and I can't even find a link to see my own reviews in my profile's page. Anyone know where it is? I've also sold by FBA. Their web site for sellers looks like it was made in the 90's, and discoverability is atrocious. I have to keep trying different links to see if it will take me to the report/inventory view I'm looking for. And I've dealt with several bugs on those pages (e.g. updating a price would not work sometimes). Then there's their policy of comingling, so that when you buy a brand new item that is "Shipped and sold by Amazon.com", there is no guarantee you're not getting the item that an FBA seller put into their warehouse. Hence, no way to guarantee you didn't get a fake product. Then when you check out sites like fakespot.com, you'll find how many products have incredibly gamed reviews. Amazon's reviews was what set them apart, and is now horribly unreliable. And then add to that mix the fact that many reviewers are actually reviewing the fake product that was shipped to them instead of the bona fide on. How do I know if the product is bad from the reviews? I can't. And then to top it all off, when looking at one product, it's actually a combination of several ones that you have to pick. In some cases this makes sense - say I'm buying a particular brand of slippers, and they have different colors, that's fine - as long as the "model" is the same. But when I'm looking at a whiteboard, and the other option is a set of markers, that's ridiculous. The overall rating of the whiteboard has ratings of the markers mixed in. Now if I want to know the rating of just the whiteboard, I have to go through extra steps (click on Format, etc).
mhxion 7y ago
From the letter: > Within AWS, that same pattern has recurred many times. For example, we invented DynamoDB, a highly scalable, low latency key-value database now used by thousands of AWS customers. And on the listening- carefully-to-customers side, we heard loudly that companies felt constrained by their commercial database options and had been unhappy with their database providers for decades – these offerings are expensive, proprietary, have high-lock-in and punitive licensing terms. We spent several years building our own database engine, Amazon Aurora, a fully-managed MySQL and PostgreSQL-compatible service with the same or better durability and availability as the commercial engines, but at one-tenth of the cost. We were not surprised when this worked.

by GlennS 7y ago

jcims 7y ago

>Amazon are optimizing customer satisfaction and rate of fullfillment. This isn’t just a byproduct of high speed/low drag commerce, they intentionally and aggressively focus on and invest in customer satisfaction. Anecdotally and most certainly with exception in this very audience they are easily in my top three if not GOAT for direct human to human empathetic and effective customer service. Google in comparison leaves me feeling like I’m twisting random knobs on someone else’s lab project.

PakG1 7y ago
Looking at this now, it's amazing to compare with the public criticism that Werner Vogels gave to the face of the corporate blogging movement back in 2006. https://www.allthingsdistributed.com/2006/03/naked_answers.html https://www.allthingsdistributed.com/2006/03/naked_answers.h... Back then when he claimed that Amazon did a very good job of being customer focused, I was thinking: maybe, but whatever, I'm not sure what's special about their customer experience compared to others. Today, I'm thinking: wow, now that's a real example of audacious vision both executed and realized.
- BryantD 7y ago
  The Scoble post he linked to in the above is now located here: https://scobleizer.blog/2006/03/30/three-audiences-three-different-cultures/ https://scobleizer.blog/2006/03/30/three-audiences-three-dif...
- ajaynv87 7y ago
  On a tangent, I recently interviewed with amazon and you can tell everyone’s being pushed to go to great lengths when it comes to customer satisfaction. The interview really gave me a sense of what amazons thinking when they give you a 25 dollar discount when you call them about a delayed delivery on a 30 dollar item. From the outside looking in, you think they are crazy but when you’ve seen the organizational obsession with customer satisfaction, it all makes complete sense.
andyrichardson 7y ago
You're 100% right. Look at #1 of their leadership principles https://www.amazon.jobs/en-gb/principles https://www.amazon.jobs/en-gb/principles As a customer and as a former interviewee, their motives were always very clear.
- mcny 7y ago
  It is so easy to say that customers are our number one priority but I realized Amazon.com was different when my team was implementing gift cards at a smaller (still subsidiary of a public) company (not Amazon). The question was simple: why do gift cards have to expire? The answer that nobody wanted to say: because we don't want to leave money on the table. It was a frustrating exercise in futility as the customer priority took a back seat at the first sign of decreased liability/free money. Also we would cancel orders for relatively minor pricing mistakes where I believed we should have ate those costs as a teachable moment. On the other end though, as a customer I'm more scared of Amazon than walmart. As an Amazon.com customer, I consciously avoid returning unless I absolutely have to because I care about my account. I fear amazon will honor my ridiculous requests to a point and ban me at some point. I (unsuccessfully) tried to return an air mattress to Walmart after a week of use because it didn't hold air perfectly (they never do). I don't fear being banned by Walmart.
  - katbyte 7y ago
    > As an Amazon.com customer, I consciously avoid returning unless I absolutely have to because I care about my account. I fear amazon will honor my ridiculous requests to a point and ban me at some point From my experience i've had the opposite approach. Anything that doesn't live up to my standards or simply doesn't work out i return. I return ruthlessly and i've never had any problems. However my rate of return is still less than 1 in 20 and i purchase a fair amount. I've never heard of anyone being banned for returning items on amazon?
    - eropple 7y ago
      I've heard of people getting banned for repeatedly buying and returning high value items. I have a video studio and while building it out I was going through a lot of returns of items that just didn't live up to their product pages' claims. As I was nervous about getting canceled I made sure to call Amazon and the CS rep put a note in my file about why I had a high (like 10%, but of relatively expensive stuff) return rate. She told me she gets asked to do that once in awhile and that she'd never heard of problems once somebody had done that.
BryantD 7y ago
This is absolutely true -- Amazon sets a high bar for customer service when it comes to returns, making things right, etc. And yet there's this problem with fraud! Counterfeit products, Kindle Unlimited scammers, etc. I'm not totally sure how to reconcile the two. Possibly it's that the customer service mentality is very strong in the group that's responsible for saying "yes, you can return that" but not as strong in the engineering/product teams in retail? (AWS is functionally a different organization than retail, which is probably worth remembering for these discussions.)
BeetleB 7y ago
I keep hearing that Amazon is "customer obsessed", and I wonder who these happy customers are. Their web site design leaves much to be desired. And it's heavy. Before I upgraded my PC, I dreaded opening a few Amazon tabs - it would bring my PC to a crawl. No other retailer had this problem. In the old days, with a single click, I could go to the Reviews page. Now the product page has no immediate click to the Reviews - I have to scroll down and click on it. Clicking the link on the top just takes me to the shorter review at the end of the page (and I have to scroll again to get to See All Reviews). When I write a review, I have no way (that I know of) to get notified of comments to my review. If there's an option for it, do let me know. I just checked and I can't even find a link to see my own reviews in my profile's page. Anyone know where it is? I've also sold by FBA. Their web site for sellers looks like it was made in the 90's, and discoverability is atrocious. I have to keep trying different links to see if it will take me to the report/inventory view I'm looking for. And I've dealt with several bugs on those pages (e.g. updating a price would not work sometimes). Then there's their policy of comingling, so that when you buy a brand new item that is "Shipped and sold by Amazon.com", there is no guarantee you're not getting the item that an FBA seller put into their warehouse. Hence, no way to guarantee you didn't get a fake product. Then when you check out sites like fakespot.com, you'll find how many products have incredibly gamed reviews. Amazon's reviews was what set them apart, and is now horribly unreliable. And then add to that mix the fact that many reviewers are actually reviewing the fake product that was shipped to them instead of the bona fide on. How do I know if the product is bad from the reviews? I can't. And then to top it all off, when looking at one product, it's actually a combination of several ones that you have to pick. In some cases this makes sense - say I'm buying a particular brand of slippers, and they have different colors, that's fine - as long as the "model" is the same. But when I'm looking at a whiteboard, and the other option is a set of markers, that's ridiculous. The overall rating of the whiteboard has ratings of the markers mixed in. Now if I want to know the rating of just the whiteboard, I have to go through extra steps (click on Format, etc).

mhxion 7y ago

From the letter: > Within AWS, that same pattern has recurred many times. For example, we invented DynamoDB, a highly scalable, low latency key-value database now used by thousands of AWS customers. And on the listening- carefully-to-customers side, we heard loudly that companies felt constrained by their commercial database options and had been unhappy with their database providers for decades – these offerings are expensive, proprietary, have high-lock-in and punitive licensing terms. We spent several years building our own database engine, Amazon Aurora, a fully-managed MySQL and PostgreSQL-compatible service with the same or better durability and availability as the commercial engines, but at one-tenth of the cost. We were not surprised when this worked.