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