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A Journey Down the Amazon.com River

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In a year filled with frustrating statistics for the publishing industry
(huge returns, low margins, another book by Howard Stern), a Seattle-based
company has guided the book industry down an unknown path with an eclectic
mixture of high-tech wizardry, marketing savvy, and a genuine passion for
books.

For those who haven’t heard yet, here are some facts about Amazon.com:

  • First opened its cyber doors to the public in July 1995.
  • The largest cyberspace bookstore in the world.
  • Offers customers over 1.1 million book titles.
  • Allows buyers to search for books by author, title, and subject.
  • Customers can read reviews, post their own reviews, add books into their personal “shopping bag,” and purchase books online.
  • Sales have been growing at more than 25% per month since its inception.

I spoke with Jennifer Cast, Director of Marketing for Amazon.com, who shared
her insights into the remarkable growth of this company. We also discussed
some specific tips on how publishers can utilize the services of Amazon.com
to promote and sell their titles.

KL: How did the company get its start?

JC: Jeff Bezsos was a successful young executive on Wall Street who was
looking for an opportunity to create his own business. Like others, Jeff was
fascinated with the phenomenal growth of the Internet and he began to
research business opportunities using the Net.

After careful analysis, he started Amazon.com which, in just a few months,
has become the most successful Internet bookstore in the world.

KL: Why did Jeff believe that selling books on the Internet would be so
successful?

JC: A number of factors. One, he knew that the consumer book market was
large. Two, he determined that the price point for a book was appropriate for
the Internet. Third, he believed that the Internet offered a unique
opportunity to provide information about books (synopses, reviews, cover art)
so that customers could make an informed buying decision.

And most importantly, Jeff knew that the technological reach of the Internet
would allow it to offer something that you couldn’t do anywhere else.
Specifically, Amazon.com could offer a huge selection of titles, substantial
savings, and fast service to a worldwide customer base. Amazon.com, like its
namesake, would be the biggest in the world.

KL: How do you compare yourself to your competition?

JC: “Land based” bookstores carry an average of 35,000 titles. The biggest
Barnes & Noble carries about 175,000 titles. Not only do we offer more
titles, we provide customers with discounts on more titles that any other
bookstore. We offer discounts of 10-40% on our top 300,000 titles.

KL: Many consumers are aware of the savings available through Amazon.com, but
they are equally impressed by your speed of service. How do you deliver
products so quickly?

JC. Having our headquarters based in Seattle was a strategic decision made by
Jeff. In addition to tapping into the high-tech talent in this area, we are
located near most of our key distributors, such as Baker & Taylor and Ingram.
Plus, we have relationships with over 20,000 publishers.

We have a warehouse where we inventory our top 200-300 bestsellers. For the
balance of our titles, we order through our distributors and publishers,
package them in our warehouse, and ship directly to our customers.

Most of our titles are shipped within one to three days. Special order books
will take anywhere from one week or more, depending on the book’s
availability.

KL: I understand that all your sales figures are confidential, but what are
some benchmarks which would describe the phenomenal growth of your company?

JC: We’ve grown from two employees to 200. We’ve already moved a couple of
times and our warehouse is now located in our new 55,000 square foot
facility. Additionally, we are hiring a management team consisting of top
executives from a number of companies including Federal Express, PC Magazine,
Barnes & Noble, and Dreyers.

KL: How can publishers work with Amazon.com to promote their titles?

JC: The key is to make sure that their titles are listed in our catalog.
We’ve set up a system to make it very easy for publishers to visit our site
and keep us informed about their titles. If they visit Amazon.com and click
on the “Are You a Publisher?” button, they will see a list of options to
promote their titles including posting graphics, advance notices, excerpts,
and table of contents.

KL: How can publishers make sure that their titles are reviewed by
Amazon.com?

JC: We have a group of in-house editors and also a freelance network of over
40 book editors broken down by subject who regularly review books for us.
Categories include Travel, Romance, Horror, Film, Science Fiction, and more.
It’s a dual responsibility. If the publishers keep in touch with us, we will
let them know where to send their books for review.

KL: What about publishers who currently have a website but are interested in
someone else handling the sales transaction and fulfillment?

JC: We have the Amazon.com Associates Program. This program allows any
business entity to build a Specialty Bookstore on their own website. Their
website is then hot linked to Amazon.com which provides customers with a book
detail page and order procedures.

KL: If the businesses don’t receive the direct sale, what’s the benefit to
them?

JC: Amazon.com pays Associates 8% of revenue (excluding shipping and
handling; quarterly payments) from all book sales that are generated through
their website.

Because Amazon.com provides encrypted sales transactions, fast customer
service, and a well-known name, we believe that we provide real added-value
for our Associates.

Many publishers also like joining our Associates Program because it provides
extra sales revenue and new customers.

The Associates Program, by the way, is not limited to publishers. Nonprofit
organizations and authors also use the Associates Program to bolster their
website and generate sales. If anyone wants more information about this
program, they can just click on “Sell Books from Your Site.”

KL: What specific opportunities are there for authors to promote their books
with Amazon.com?

JC: If authors visit Amazon.com and click on the “Is There an Author in the
House?” button, they will find information about posting self reviews, author
interviews, and even opportunities for book signings in Seattle. In the
future, we will be doing author chat groups and real-time audio interviews.

KL: What does the future look like for Amazon.com?

JC: Right now, we carry books written in English that are currently in
print. We are looking at increasing the number of books we offer. We’re also
working on adding new features to enhance our customers’ shopping experience.
We want people to know that when they visit Amazon.com, they’ll discover
books, authors, and topics that will inspire and interest them.

Approximately 40% of our customers are repeat customers, which means we have
a loyal customer base and a big opportunity to grow even larger as we expand
our efforts into new markets.

KL: We’ve all heard of the enormous technical problems with some online
companies such as AOL. How do you intend to keep up with the increasing
consumer demand on your website?

JC: Our Number One Goal is to keep our doors open and to make sure that our
customers are serviced. If the doors are closed, no one can buy books.

With that in mind, we pay close attention to our technical needs and our
server capabilities. We also hire the best technical staff to keep our
servers running 24 hours a day and to update our website on a daily basis.

KL: What influence do you think Amazon.com is making on the industry?

JC: Publishers Weekly has stated that we have been good for customers and for
the industry. Most of the people at Amazon.com have a real passion for books
and we believe that our company is helping spread this passion for books to
consumers all over the world.

Ken Lee is Vice President of Michael Wiese Productions. MWP’s professional
film and video books are sold throughout the world. MWP also provides
consulting services to publishers, video companies, and independent
producers. Lee can be reached at Michael Wiese Productions, 11288 Ventura
Blvd., Suite 821, Studio City, CA 91604, e-mail kenlee@earthlink.net, phone
818/379-8799, and fax 818/986-3408. http://websites.earthlink.net/~mwp is
MWP’s website address.

This article is from thePMA Newsletterfor March, 1997, and is reprinted with permission of Publishers Marketing Association.

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