The running of Amazon’s 3rd annual Digital Day sale, and the last day for Sears to sell itself out of bankruptcy, makes this a doubly appropriate day to review at long last Brad Stone’s seminal history of Amazon, The Everything Store. I had somehow managed not to get around to reading it until now, but I found it a fascinating story, replete with numerous insights into Amazon itself and its idiosyncratic founder, Jeff Bezos. (I read it on my Kobo Forma, for the irony value.)
Written in 2013, the book doesn’t cover more recent events such as the final outcome of the Apple anti-trust trial, or Amazon’s purchase of Whole Foods, but what it does cover is ample to demonstrate just how these things fit into the overall Amazon pattern. And learning about the people and events behind the early days of Amazon, Amazon Prime, Amazon Web Services, and—of course—the Kindle was extremely interesting.
As far as I could tell, the book tried to be as objective as possible in covering its subject matter. It did so in great detail, with a considerable amount of research. (Jeff Bezos’s wife Mackenzie was notably not a fan, but she’s not exactly neutral in relation to its subject matter.)
It’s not really possible to summarize such an in-depth profile, but it starts in the early days when Jeff Bezos was one of the first people to see the true potential of the nascent commercial Internet. They founded the business to sell books—Bezos was a major fan of literature, and books were a commodity that could be easily stored and shipped from place to place.
From there, the book covers Amazon’s expansions and growing pains, the hiring and departure of numerous executives, and so forth. It devotes sections to Bezos’s early life, Amazon’s decisions to add more product lines, Amazon Prime, the sales tax controversy, and of course Amazon Web Services and the Kindle, as it traces how Amazon emerged from a rocky start, survived the dot-com bust, and gradually grew into the powerhouse it is today—while competing chains like Borders, Barnes & Noble, and the aforementioned Sears gradually dwindled.
The section on the Kindle is particularly fascinating. Bezos had been aware of e-readers as far back as the creation of the Rocketbook LCD reader. Indeed, if the Rocketbook hadn’t fallen victim to acquisition by a company without the necessary vision and leadership to follow through with it, it could well have eventually formed the basis for an ebook market instead of the Kindle.
Bezos never lost interest in the idea of electronic books. He knew that if Amazon didn’t figure out how to disrupt its own book market with ebooks before a competitor like Google or Apple did, Amazon could potentially follow the example of Kodak—whose disdain for the digital camera technology it itself invented eventually led to its film business being entirely eclipsed. If Amazon didn’t have expertise in developing hardware, no matter—Amazon could (and did) hire people with that expertise. After that, it was just a matter of making sure they had enough books available for the launch.
The book does not spare Amazon from scrutiny as it covers how the company used its growing power in the marketplace to clobber companies it wanted to buy, such as Zappos and Diapers.com, so it could pick them up at bargain prices. It also discusses the pressure Amazon put on its suppliers to squeeze the best deals out of them, such as when it insisted publishers provide it with a total of at least 100,000 available ebook titles for the Kindle’s launch (without happening to mention it was going to discount Kindle editions of bestsellers and new titles to $9.99).
(It doesn’t cover the time Amazon attempted to put the squeeze on print-on-demand publishers until Pocker OD press Booklstood up to Amazon in court and forced it to back down. However, that incident pretty clearly fits into the pattern established by the ones the book does mention.)
The book came well before Amazon decided to buy Whole Foods, but does discuss the early stage of Amazon’s foray into groceries with AmazonFresh. It also came before PrimeNow, but does mention the possibility of same-day delivery service once Amazon is able to locate warehouses near enough cities. Stone also accurately predicted that Amazon would soon get into smartphones and set-top boxes as well.
The coverage of Amazon’s ruthless (or relentless) business practices does give one pause about shopping there—but clearly not too much pause, given that Amazon is obviously still doing a land office business. And it also shows that Amazon is largely a product of the capitalist system that spawned it.
Corporations have to maximize value for their shareholders, and benefit for their customers, after all. If they don’t, someone else comes along and eats their lunch. I find it hard to imagine that many other companies would have acted differently in Amazon’s position, if they had the same amount of weight to throw around. (Indeed, Wal-Mart—founded by Bezos’s idol Sam Walton—is also known for ruthlessly squeezing its suppliers.) It might be more apt to hate the game than to hate the particular player.
If Amazon (or any other retailer) does violate the law, it should absolutely be brought to task for it. Although Amazon has largely been able to avoid antitrust scrutiny so far, Stone predicts that it will sooner or later. It still remains to be seen just when and if that will happen, however.
Stone doesn’t remain entirely aloof from the subject matter he covers. Toward the end of the book, he describes approaching Bezos’s estranged biological father, Tom Jorgenson, who had forgotten the surname of his ex-wife’s new husband and so had no idea he was the parent of one of America’s most successful businessmen. Jorgenson later got in touch with Bezos via email and Bezos eventually sent a friendly reply.
Overall, I found The Everything Store to be a fascinating book, well worth reading if you want to understand more about the principles behind Amazon and how the company does what it does.