Amazon: 10 Secrets You Didn't Know
The dot-com bubble that had been ballooning in the 1990s burst in March 2000. In the 27 days spanning March 10 to April 6, 2000, NASDAQ stocks shed $1 trillion in value, rendering the stocks of online retailers such as Pets.com and eToys.com worthless. In 1997, Amazon.com Inc.’s (NASDAQ: AMZN) CEO Jeff Bezos pledged to deliver long-term value to shareholders, and the promise has proved far from empty. After emerging steadily from the rubble of the technology collapse in 2000, AMZN plowed its way to a nearly $864.3 billion market capitalization as of July 26, 2018. For Q2 2018, Amazon boasted a 39% increase in sales to $52.9 billion. While the stock’s rise has been well chronicled, here are some less well-known facts about the world’s largest online purveyor.
Amazon’s fulfillment centers hum with the muted din of robots, 100,000 (as of July 2018) pick, sort, and pack across global warehouses. While the bots do not bode well for the future of the traditional warehouse worker, Amazon’s operating expenses have been reduced by over 20% since Bezos spent $775 million in 2012 to acquire robotics manufacturer Kiva.
Wealth of Patience
If an investor had bought just two shares of AMZN stock went they public at $18 per share in 1997, those shares would have been worth about $43,752 on July 25, 2018, with a close price of $1,823 per share.
Is Bezos Underpaid?
Bezos earned a salary of $81,840 in 2017. That figure is about equal to the median salary of a manager in the information technology sector. Of course, it helps to own nearly 17% of AMZN shares. Bezos likely eschews the brown bag for lunching out on occasion as his net worth is around $150.1 billion as of July 27, 2018, cementing his position as the world’s richest person.
No Time for Downtime
Nothing positive can result when servers go down in a virtual retail environment, especially when revenue is involved. It is estimated that a 40-minute crash of the Amazon platform in 2013 cost the company a top-line loss of $4.8 million, or $120,000 per minute. The site also crashed on Amazon Prime Day 2018 for several hours, resulting in a temporary block of all international traffic.
If a nice frame for your family pictures sounds like a nice perk, Asana, a privately held software company, offers employees $10,000 for desk accoutrements. Amazon employees, by contrast, get no free lunches and would do well to stash a flashlight in their drawers. Light bulbs are removed from vending machines to save on electricity.
It may behoove employees to sharpen their Microsoft Corporation’s (NASDAQ: MSFT) Office suite skills, but PowerPoint need not be one of them. Amazon does not allow the presentation software in meetings. Rather, participants are required to quietly pore over topical reading material for 30 minutes at the beginning of each gathering, according to Bezos’s latest letter to shareholders.
When it began in 1994, Amazon’s first foray into cyber-retail involved only book sales. The company’s offerings extend to over 20 primary categories and nearly 150 subcategories. Books and consumer electronics continue to dominate sales. Amazon even offers food on its virtual shelves; however, more than one-third of Amazon shoppers still shy away from purchasing.
There’s no need to leave the couch to shop. Amazon’s mission revolves around customers who make purchases from anywhere at any time. Convenience is not Amazon’s only competitive advantage. On average, products sold on its websites in 2016 were nearly 20% less expensive than big-box retailers such as Walmart Stores Inc. (NYSE: WMT).
Walk a Mile in My Shoes
“That’s not my job.’’ At Amazon, management begs to differ. The consumer-centric organization mandates that every employee, even Bezos himself, spend two days in a two-year time span as a customer service rep. The demand reinforces hiring principles that require its leaders to “start with the customer and move backward.”
One of Amazon’s most famous customers may also be its most controversial. The Central Intelligence Agency (CIA) signed a $600 million cloud storage deal with the company’s Amazon Web Services division. With more than 162 million unique visitors per month, a grassroots petition has been circulated urging that Bezos not share customer data with the CIA.
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