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Source: Harvard Business Review
Published: October 2007

You’re going to let anybody take Amazon traffic?

Circulated: March 17, 2020

This episode is one of the highlights of our corporate history—one that speaks to persistence and relentlessness.

Background

Amazon gets selection on our website by inviting third-party sellers to participate on the website alongside us.

Experiments

We launched Auctions (March 1999), but we didn’t like the results. Next we created zShops which was fixed-price selling where each offer has its own detail page (September 1999). We still didn’t like the results.

Solution

If Amazon is offering a product and you’re a third-party seller with the product to sell, you can go on our own detail page, and underbid us.

Internal tension

It was a very controversial decision internally at the time. Our retail buyers objected: “Let me just make sure I understand this. I might get stuck with 10,000 units of a camera because you’re going to let anybody come in and take Amazon traffic?” Leadership said, “Yeah, we are.”

Outcome

When we went to the single-detail-page model, our third-party business really took off.  When the internal conversation gets too hard, we take a simpleminded approach. We convert it into a straightforward problem by saying, “Well, what’s better for the consumer?”

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