One summer in 1994, Jeff Bezos made what seemed like a crazy decision at a hedge fund company in New York.
He quit his high-paying job, driving an old Chevrolet, and traveled with his wife from New York to Seattle. There was a laptop in the car, and he was writing a business plan in the passenger seat while driving.
There was only one goal:
To create a new company in the newly born internet world.
This company would later change global retail – Amazon.
But at that time, no one believed in this idea.
Because Bezos's plan sounded too ridiculous:
"Selling books online."
One, the bet that started in the garage
In 1995, Amazon was officially founded in a regular garage in Seattle.
At that time, the website was very rudimentary, and there was only one type of product: books.
But Bezos's logic is very clear.
Books have three advantages:
A huge variety (millions of types)
Standardized products
No need for trials
In physical bookstores, you can only place a few tens of thousands of books at most.
But online, you can store an infinite number of books.
This is Amazon's first core strategy:
"Infinite Shelf"
On the first day Amazon went online in 1995, the first book was sold.
A few months later, orders were already coming from all 50 states in the U.S. and 45 countries.
At that time, there were only a few employees.
When packaging orders, they even kneeled on the floor to pack.
But Bezos was already thinking bigger.
He once said a very famous quote:
"We are not a bookstore; we are a technology company."
Two, Bezos's crazy strategy
When Amazon went public in 1997, almost all analysts were skeptical.
Because Amazon has always been losing money.
But Bezos didn't care at all.
His strategy can be summed up in one sentence:
"Growth first, profit later"
Means:
Occupy the market first, then talk about making money.
At that time, Amazon did three things that changed the industry:
1 Low-price strategy
Amazon has pushed book prices to the lowest.
Often, it is even close to cost.
There is only one purpose:
Defeating competitors.
This puts traditional bookstores like
Barnes & Noble
and
Borders Group
under immense pressure.
2 Ultimate customer experience
Bezos has a very famous philosophy:
Customer Obsession
Amazon introduced many features that seem very ordinary today but were revolutionary back then:
User reviews
One-click purchase
Product recommendation algorithms
Fast delivery
These things are everywhere now, but they were revolutionary at the time.
3 Continuously expanding categories
Amazon quickly became more than just a bookseller.
Next is:
Music
Movies
Electronics
Toys
Clothing
Finally turned into:
"The Everything Store"
Three, the near-death dot-com bubble
In 2000, the dot-com bubble burst.
Hundreds of online companies went bankrupt.
Amazon's stock price fell from $107 to $7.
Many media declared that Amazon was about to go bankrupt.
But Bezos did one crucial thing:
Building a logistics empire.
He began to invest a large amount of money to build:
Warehousing centers
Automated logistics
Delivery systems
In the short term, it seems like a crazy burn of money.
But ten years later, these investments became Amazon's most terrifying moat.
Four, the real money printing machine: AWS
In 2006, Amazon made another decision that changed the tech industry.
Launch
Amazon Web Services (AWS).
The concept of this service is very simple:
Renting servers to others.
In the past, if a company wanted to build a website, it needed to buy its own:
Servers
Data centers
Networking equipment
The costs are very high.
The model of AWS is:
Pay as you go, like utilities.
Today, many technology companies around the world rely on AWS, for example:
Netflix
Airbnb
Spotify
AWS became Amazon's super money printing machine.
Although retail profits are very low, the profit margin of AWS is very high.
Five, Prime: the most successful membership system
In 2005, Amazon launched a service that seemed very risky:
Amazon Prime
Pay a fixed annual fee, and you can:
Free two-day delivery
Watch movies
Listen to music
Enjoy various discounts
At that time, many people thought it would lose money.
But the result was completely opposite.
The average spending of Prime members is more than twice that of ordinary users.
Prime has become a psychological mechanism:
"Since we've already paid the membership fee, let's buy a bit more."
Today, there are over 200 million Prime members worldwide.
Six, the power of the platform economy
Amazon's true power is not just selling things.
But it is to build a platform.
Many products on Amazon today are not sold by Amazon itself.
But it is the third-party merchants.
Amazon provides:
Platform
Warehousing
Logistics
Traffic
Then take a commission.
This is the famous:
Marketplace model
Today, over 60% of the products on Amazon come from third-party sellers.
This has turned Amazon into a super ecosystem.
Seven, the essence of technology companies
Many people think Amazon is just e-commerce.
Actually, it isn't.
Amazon is more like a:
Technology infrastructure company.
It controls three key areas:
1 E-commerce platform
2 Cloud computing
3 Global logistics
These three reinforce each other.
For example:
AWS provides technical capabilities
Logistics improves delivery efficiency
E-commerce provides huge traffic
This creates a huge flywheel effect.
Eight, Bezos's "Flywheel Theory"
One of Bezos's most famous management thoughts is:
Flywheel
The core logic is:
Low prices
→ Attract more customers
→ Bring more sellers
→ More products
→ Larger scale
→ Lower costs
→ Further reduce prices
Then the flywheel spins faster and faster.
This model allows Amazon to continue to expand.
Nine, today's Amazon empire
Today's Amazon has become one of the largest companies in the world.
Its influence spans various fields:
E-commerce
Cloud
Logistics
Entertainment
Artificial Intelligence
During the 2020 pandemic, global consumption shifted heavily online.
Amazon became one of the biggest beneficiaries.
Bezos's net worth once made him the richest person in the world.
Ten, the real secret of Amazon
If I had to summarize Amazon's success in one sentence, it would be:
Long-term thinking.
One of Bezos's most frequently said phrases is:
"If you only look at three years, you'll compete with a lot of people;
if you look at seven years, there are far fewer competitors."
Almost all of Amazon's decisions are:
Betting on the next ten years.
Logistics
Cloud
AI
Automation
These are all long-term investments.
Conclusion
From a garage bookstore to a global tech giant, Amazon's story is not an overnight success.
But it is a long-term strategy that lasts for 30 years.
Jeff Bezos once said:
"Day 1."
Means:
No matter how big the company is, it must maintain the mindset of the first day of entrepreneurship.
Because once you enter Day 2, companies will begin to decline.
Perhaps it is this forever 'Day 1' spirit,
that has allowed Amazon to transform from a small online bookstore to today's business empire.
