The Amazon effect

Wasserman, S. (2012, May 29) The Amazon effect. The Nation. Retrieved from

https://www.thenation.com/article/archive/amazon-effect/

Jeff Bezos created the juggernaut that is Amazon with two key insights: the Internet provided individuals with purchasing power regardless of geography directly and that these purchases would provide companies with enormous amounts of information from individual consumers that he could use to tailor their shopping experiences in the future. Amazon entered the market by selling books directly to consumers, capitalizing on a Supreme Court ruling that allowed him to avoid passing along sales tax to consumers since he had no brick and mortar store. He had no physical limits on the book titles he could sell, therefore, he was able to offer consumers more choice from the comfort of their own homes. Like big box stores, Amazon decimated the independent bookstore industry, beating them on price and selection; what it also did was compete dramatically with big box bookstores like Barnes & Noble (B&N), and put Borders out of business. Amazon created the digital reading economy, and created an environment where, in order to compete, B&N had to devote substantial resources to its on digital competition. As Amazon ventured into the technology production space with its Kindle e-book, it forced others like B&N to do the same, as increasing shares of the book reading market went to e-readers. Up to 60% of these sales are made up of escapist literature like sci-fi or romance. This market shift is impacting publishers as well as booksellers; many have not adapted to this changing model of sales and struggle in an industry increasingly dominated by Amazon. Bezos knows this and has started Amazon’s own publishing company and contracting with certain publishes to put physical copies of their titles in stores. It has also flipped the script in terms of writers’ contracts, offering a significantly higher percentage of royalties on sales with no up-front advance; this encourages the attitude that anyone can write professionally, and without commitment. As e-book sales boom, Bezos continues to purchase online retailers like Zappos to expand his online shopping empire and the on-the-ground infrastructure needed to supply it.

Wasserman articulated a robust history of Amazon, the good, the bad, and the ugly. I learned a significant amount about the history and components of Amazon and Jeff Bezos’ strategy that has informed the way I am able to speak to and about Amazon. This article also offered me strategies for dissecting large organizations and ways to discuss and advocate for or against a corporate policy.

LO2: demonstrate the ability to assess complex organizational environments and achieve communication goals.

LO5: critically analyze messages.