In 1997, when Amazon first went public, Jeff Bezos wrote what is likely to be crucial letter to shareholders from any firm. In it, he laid out a imaginative and prescient for the corporate he based in his storage that appeared, on the time, fairly totally different than what had come earlier than.
What Bezos wrote then was so necessary to Amazon as an organization that it has been connected to each subsequent shareholder letter since. It described Bezos’ dedication to give attention to the long run, even when it meant shedding cash within the brief time period.
Amazon positively is not shedding cash anymore. The truth is, as Bezos approaches the finish of his time as CEO of Amazon, the corporate introduced what can solely be described as its finest quarter ever.
From a pure numbers standpoint, this wasn’t Amazon’s largest quarter. That will be the one which resulted in December when the corporate posted $125.5 billion in income. That is sensible. Not solely does that timeframe embrace the vacation procuring season, however Amazon additionally held its Prime Day sale throughout October final yr. That two-day occasion alone accounted for $10.4 billion in income.
Final quarter, nevertheless, had no such enhance, however the on-line retailer nonetheless generated $108 billion, and greater than $8 billion in profit–the latter of which was the very best ever for the corporate.
As I listened to Amazon discuss its outcomes, I used to be reminded of three phrases from that letter that, trying again, appear virtually prophetic by way of what we have seen over the previous few months. The three phrases?
“Obsess Over Clients”
You may draw a straight line from the phrases Bezos wrote 24 years in the past, to the corporate’s outstanding success over the previous yr. Because the pandemic took maintain, there was actually no firm higher positioned to satisfy the extraordinary wants of its prospects than Amazon.
On the time, Bezos defined it like this:
From the start, our focus has been on providing our prospects compelling worth. We realized that the Internet was, and nonetheless is, the World Large Wait. Subsequently, we got down to supply prospects one thing they merely couldn’t get every other manner, and started serving them with books. We introduced them way more choice than was potential in a bodily retailer (our retailer would now occupy 6 soccer fields), and offered it in a helpful, easy-to-search, and easy-to-browse format in a retailer open one year a yr, 24 hours a day. We
maintained a dogged give attention to bettering the procuring expertise, and in 1997 considerably enhanced our retailer.
Despite the fact that these phrases have been written 24 years in the past, they’re precisely why Amazon simply had its finest quarter ever. Amazon was obsessive about assembly the wants of its prospects, and has been relentless in its dedication to serving them higher.
When individuals weren’t positive if it was protected to go away house to purchase the easy objects they wanted every day, Amazon had already constructed one of the vital environment friendly techniques ever imagined for turning a number of clicks on an internet site right into a brown field in your entrance porch. That is why thousands and thousands of Individuals went on-line to seek out all the pieces from bathroom paper, to non-public care objects, to groceries.
Brian Olsavsky, Amazon’s chief monetary officer defined it within the context of turning “clicks into productive gross sales. If a buyer finds what they’re searching for, at a value they’re keen to pay, with out having to attend greater than a day or so for it to be delivered, they make a purchase order. That is a productive sale.
The inspiration for that did not begin this quarter. It did not occur final yr when the world got here to a cease. It occurred with an concept specified by a letter that got here to outline the corporate’s selections for greater than 20 years. For those who obsess over your prospects first, you may be able to earn their enterprise.
“We’re nonetheless within the early levels of studying the way to deliver new worth to our prospects by means of Web commerce and merchandising,” Bezos wrote. “Our aim stays to proceed to solidify and lengthen our model and buyer base. This requires sustained funding in techniques and infrastructure to assist excellent buyer comfort, choice, and repair whereas we develop.”
In brief, it requires an organization to obsess over its prospects. He may have written these phrases about this final quarter. As a substitute, the truth that the corporate has lived them out for twenty-four years is why it simply had its finest quarter ever.