The Unconventional Business Strategies Behind Amazon’s Massive Success
Learning To Do Business The Amazon Way
As the world’s largest Internet retailer in the world based on revenue and market capitalisation, Amazon undoubtedly did not get to where they are without making some game-changing moves and playing by the same rules as everyone. Here are the key strategies and bold moves that have brought Jeff Bezos staggering success.
Underlying Amazon’s massive success, is Jeff Bezo’s unyielding business philosophy to think in decades instead of quarters. For almost 20 year since the Amazon first launched, it had yet to report a meaningful profit. This chart captures the contradiction pretty well - massive revenue growth unmatched by profit growth.
Bezos has a reputation for sacrificing profits to invest in long-term goals, more specifically, customer loyalty and product opportunities.
According to Bezos in his letter to shareholders in 2013, "Take a long-term view, and the interests of customers and shareholders align."
Get Used to Failure
With the blind pursuit of profits out of the way, Bezos brazenly focuses on value creation and investing in testing out new product opportunities no matter the odds. Bezos said in 1997, "Given a 10% chance of a hundred times payout, you should take that bet every time."
Embracing failure and experimentation is what produced some of Amazon’s greatest products and services, from the Kindle and Amazon Prime to the Amazon Marketplace.
According to Bezos, “If you’re going to take bold bets, they’re going to be experiments,” Bezos explained. “And if they’re experiments, you don’t know ahead of time if they’re going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”
Build a Customer-centric Company
All the departments throughout Amazon are completely data-driven based upon the success and failures of the customer experience. Ultimately, Bezos makes decisions to take risks to innovate based on what is best for the customer. Since what is best for the customer, will be eventually what is best for the company.
In an interview with Forbes magazine, Bezos said of his customer-centric company: “We don’t focus on the optics of the next quarter; we focus on what is going to be good for customers. I think this aspect of our culture is rare.”