{"id":115897,"date":"2023-10-26T10:35:00","date_gmt":"2023-10-26T14:35:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=115897"},"modified":"2023-10-30T10:33:00","modified_gmt":"2023-10-30T14:33:00","slug":"why-is-amazon-so-successful","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/why-is-amazon-so-successful\/","title":{"rendered":"Why Is Amazon So Successful? Here Are Jeff Bezos’s 4 Reasons"},"content":{"rendered":"\n

Why is Amazon so successful<\/a>? How does Amazon set itself apart from other businesses?<\/p>\n\n\n\n

When Amazon made over $100 billion in sales in a single year for the first time, Jeff Bezos reported that it’d achieved that volume faster than any other business. In Invent and Wander<\/em>, Bezos attributes Amazon’s success to its workers and to the company’s culture.<\/p>\n\n\n\n

Continue reading to learn more about the cornerstones of Amazon’s success.<\/p>\n\n\n\n\n\n\n\n

1. It\u2019s All About the Customers<\/strong><\/h2>\n\n\n\n

Why is Amazon so successful? From the start, Bezos declared his intention that Amazon should be the most customer-friendly business in the world. In practice, that means putting customers first is the guideline for every business decision.<\/strong> Bezos describes his deep respect for Amazon\u2019s customers, how their needs drive the business to constantly improve, and how customer focus dictates Amazon\u2019s expansion into new territories and markets.<\/p>\n\n\n\n

Bezos starts from the assumption that customers are intelligent\u2014they know the difference between good and bad service, and they can see through any flimsy marketing campaign<\/a> that might try to brush away a company\u2019s faults. Therefore, the only way to build a good brand is to always give customers a positive experience.<\/strong> No matter the customer, there are always certain constants\u2014people like having a variety of options, paying less for them, and receiving what they order quickly. These constants demand that Amazon\u2019s team meet high expectations in everything they do and teach those expectations to every new employee.<\/p>\n\n\n\n

(Shortform note: Bezos\u2019s chief marketing strategy isn\u2019t focused on selling specific items to customers as much as selling the \u201cAmazon experience.\u201d In Superfans<\/em><\/a>, Pat Flynn describes this strategy in detail, arguing that the quality of your customers\u2019 experience is more important than how many customers you have. Once customers become \u201csuperfans\u201d of a service, it becomes part of their identity<\/a> that\u2019s embedded in their daily routines. These customers become active marketers for your company, provide your business with vital feedback, and can ensure your company\u2019s overall longevity. The steps for turning customers into fans boil down to the essentials of good customer service<\/a>\u2014establish a connection and provide something of value.) <\/p>\n\n\n\n

Always Doing More<\/h3>\n\n\n\n

Amazon pushes to never stop improving<\/a> because customer expectations<\/a> always go up. <\/strong>Bezos argues that striving to keep up with its customers rather than aiming to beat the competition<\/a> forces Amazon to keep innovating<\/a> even in markets where it already has a commanding lead. Some companies focus on doing one thing and doing it well, but that can give a business tunnel vision. By placing themselves in their customers\u2019 shoes, Amazon\u2019s teams must constantly learn new areas of expertise, which then branch out into whole new markets and services that customers will enjoy. Expanding into new markets is key to keeping Amazon\u2019s customers happy as well as bringing more into the Amazon fold.<\/p>\n\n\n\n

(Shortform note: Bezos\u2019s continual expansion of Amazon\u2019s services and the markets in which it operates is a strategy that many companies employ as a bulwark against financial downturns and organizational stagnation. In The 10X Rule<\/em><\/a>, Grant Cardone cites the examples of companies like Google, Walmart, and Coca-Cola who work to make themselves omnipresent<\/a> so that virtually no one is unaware of their existence. By constantly expanding\u2014and in a sense, overcommitting<\/a> their resources\u2014companies are forced to excel and innovate<\/a> in order to survive and deliver on their promises. The end result is a business that can weather any economic downturn, because staying competitive is baked into its culture.)<\/p>\n\n\n\n

Other ways Amazon draws in new customers, as well as building trust<\/a> with those it has, include some practices that seem counterintuitive\u2014such as letting customers post negative product reviews, displaying third-party products that may be cheaper than its own, and proactively informing customers when they could get a better deal than what they\u2019re currently paying. While each of these practices results in a short-term revenue loss, their cumulative impact is an increase in customer loyalty, positive brand associations, and more future sales.<\/strong><\/p>\n\n\n\n

(Shortform note: While it\u2019s true that companies require short-term revenue to pay their bills and keep the lights on, fixating on short-term profits can blind a business to more important issues. In Zero to One<\/em><\/a>, Peter Thiel argues that entrepreneurs should grow their businesses based on 10- or 20-year projections<\/a>, even though short-term targets are easier to set and measure. In Drive<\/em><\/a>, Daniel H. Pink points out that emphasizing short-term profits leads to short-term thinking<\/a>, showing that companies that obsess over quarterly earnings spend less on research and development\u2014boosting their short-term numbers at the expense of long-term viability.)\u00a0\u00a0\u00a0<\/p>\n\n\n\n

2. Taking the Long View<\/strong><\/h2>\n\n\n\n

To maintain Amazon\u2019s market leadership, Bezos and the rest of his leadership team focus on the company\u2019s success in the future, not on its current quarterly statements. Bezos explains his insistence on making decisions that pay out in the long run, how this reflects an \u201cownership\u201d mindset, and why many of his long-term decisions are, by necessity, judgment calls.<\/p>\n\n\n\n

As early as Bezos\u2019s first letter to shareholders in 1997, he warned investors that Amazon would often engage in practices that incurred short-term losses.<\/strong> The point was to quickly take a lead in the market, which could only be done by building Amazon\u2019s brand, growing its number of repeat, loyal customers, and encouraging more and more sales through its site. He acknowledged that for purely technical reasons, online shopping in the \u201990s was still frustrating, so Amazon made up for that by reducing prices and increasing its selection. Nevertheless, the company had to be careful when cutting prices to minimize its losses as it grew.<\/p>\n\n\n\n

Bezos says that Amazon executives spend more time setting customer service goals than they do poring over financial reports, because creating value for customers<\/a> results in greater business returns over the long haul. Short-term speculators don\u2019t appreciate this mindset, but Bezos believes that good investors think like owners<\/strong> and should therefore be on the same wavelength regarding Amazon\u2019s long-term ambitions.<\/p>\n\n\n\n

3. The Will to Innovate<\/strong><\/h2>\n\n\n\n

The biggest gambles requiring the most judgment revolve around some form of innovation. Bezos places innovation at the core of Amazon\u2019s identity and culture. He explains innovation\u2019s crucial role in keeping Amazon fresh and energized, how innovation is driven by both customer needs and industrial trends, and why failure is an acceptable, necessary cost.<\/p>\n\n\n\n

Bezos\u2019s central business philosophy is that no matter how established your company is, you should always act as if<\/a> it\u2019s a startup.<\/strong> The alternative is complacency and stagnation, whereas a startup mentality brings energy and a gung-ho attitude to stay ahead. This doesn\u2019t just apply to the boss, but to every employee, because the next innovative insight could come from anywhere in the organization. For example, Bezos writes that Amazon Prime, which paid for itself by the sheer volume of business it generated, was first suggested by a low-level programmer. For this reason, all employees must be empowered to think for themselves and come up with risky ideas. If not, they may quit and innovate for your competitors instead.<\/p>\n\n\n\n

When innovating, Bezos says that it\u2019s important to keep ahead of sweeping industry trends<\/a>, such as the development of artificial intelligence, but it\u2019s equally important to be so aware of customers\u2019 needs that you can guess what they want before they know it.<\/strong> This involves a process that Bezos calls \u201cwandering\u201d\u2014inventing new products and services with only a vague notion of whether they\u2019ll be successful. This process of trial and error isn\u2019t as haphazard as it sounds, but it\u2019s driven by Amazon\u2019s employees\u2019 insights about how customers engage with the world and what potential innovations might create opportunities for Amazon and its users.<\/p>\n\n\n\n

4. Looking to the Future<\/strong><\/h2>\n\n\n\n

Amazon\u2019s success has made Bezos one of the richest people on the planet, but his ambitions don\u2019t end there. Bezos wants to use his wealth to be a positive force for change in the world. He discusses his thoughts about the social responsibilities of big business and how he\u2019s using Amazon and his aerospace company Blue Origin to improve climate conditions on Earth while laying the foundation for future space-based endeavors.<\/p>\n\n\n\n

Industry giants like Amazon are often disparaged for their success, which Bezos argues isn\u2019t helpful or fair. Because of its scale, Amazon can have a positive impact on the world<\/strong> in ways that individuals and nonprofits simply can\u2019t. One way that Amazon has sought to fulfill its responsibilities to society is by raising its wages above the minimum required and challenging other businesses to follow suit. Beyond that, Amazon offers paid tuition for employees pursuing advanced education, while extending paid leave to employees\u2019 family members whose own jobs may not provide the same. In addition to setting an example for other companies, Bezos writes that such policies are good for the recruitment and retention of dedicated workers.<\/p>\n\n\n\n

Amazon\u2019s industry leadership extends into environmental issues. Bezos prides himself that Amazon was the first business to sign the 2019 Climate Pledge,<\/strong> despite the fact that its reliance on packaging and shipping makes it a carbon-intensive industry. To meet its climate goals<\/a>, Amazon designed one of the world\u2019s most complex systems<\/a> to track and reduce its carbon emissions. In addition, Amazon\u2019s internal goal is to be carbon neutral by 2040, investing in renewable energy and a fleet of electric delivery vehicles. If it can achieve this, Amazon can pressure others to meet the same standards and even supply the technology to do so.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why is Amazon so successful? How does Amazon set itself apart from other businesses? When Amazon made over $100 billion in sales in a single year for the first time, Jeff Bezos reported that it’d achieved that volume faster than any other business. In Invent and Wander, Bezos attributes Amazon’s success to its workers and to the company’s culture. Continue reading to learn more about the cornerstones of Amazon’s success.<\/p>\n","protected":false},"author":14,"featured_media":37949,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,33],"tags":[1301],"class_list":["post-115897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-people","tag-invent-and-wander","","tg-column-two"],"yoast_head":"\nWhy Is Amazon So Successful? 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