In over a decade in which I’ve covered Amazon, one
conversation stands out as neatly summarizing the ethos of the e-commerce giant
under
Jeff Bezos, who will step aside as CEO next month. An Amazon executive
was confronting his new role as a buyer of large appliances, like dishwashers,
after several years as a book buyer. “We had beaten publishers into
submission,” the executive said, noting giddily that when “Amazon asked for a
nickel, publishers know to give a dime.”
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“We aren’t there yet with the Whirlpools and the Samsungs,”
he added. “We’ll get them under our thumb.”
Bezos, 57, has a complicated legacy of towering ambition,
extraordinary success, unimaginable personal wealth and a scorched-earth
business approach that is the envy of nearly every tech entrepreneur and a
lightning rod for criticism. He is retreating from the top role just as Amazon
faces the most serious regulatory threats to its business in its 27-year
history.
Under Bezos, who will remain as executive chairman, Amazon’s
singular focus on speedy delivery forever altered the retail landscape and
consumer expectations along with it, and left in its wake a mountain of
businesses that failed to keep pace. The company didn’t invent many of the
things it’s known for — overnight delivery, mobile shopping, cloud computing
and e-readers — but it did make them widely available and even expected.
Once-scrappy Amazon (Barron’s famously derided it as
Amazon.bomb in 1999) has grown to be among the world’s largest companies by
market value and made Bezos the world’s richest man, depending on the day. With
his early bet on the web’s growth, Bezos helped define e-commerce as we know it
and made ordering from Amazon the default for millions locked in, through the
Prime subscription service. But his true masterstroke may be Amazon Web
Services, the computing and cloud storage service that millions of companies
turn to and which has generated the bulk of Amazon’s profits.
Those who have met Bezos will instantly recall his
room-filling guffaw, which belies his relentless and, often, ruthless pursuit
of success.
Bezos founded Amazon in 1994, the
internet’s infancy, with the simple mission of stocking every book it could for
delivery by mail. That mission quickly expanded to encompass carrying nearly
every item imaginable in massive suburban warehouses and a dizzying array of
side ventures from cloud computing and home security to movie streaming,
shipping logistics and pharmaceutical services. With the cutthroat efficiency
its appliance buyer outlined, Amazon has helped drive into the ground a long
list of household name retailers and dictated ever-rising output from its
vendors and hourly warehouse workers. Unforgiving and unflinching, Bezos is a
source of inspiration to countless CEOs who have described their own vision “to
become the Amazon of” banking, video games, ride-hailing, travel, asset
management, home building, fashion, even cannabis.
Bezos’ philosophy that he was
“willing to be misunderstood for long periods of time” ultimately enriched him
and investors but it had a darker side: an ultracompetitive workplace where
employees are obsessively measured against one another and encouraged to
trample their way to the top.
Amazon has become almost unavoidable on the web. Bezos’
Prime membership is a triumph of consumerism, making shopping on Amazon a daily
habit for millions worldwide and an essential service during the pandemic,
bringing groceries and other goods to doorsteps of those too skittish to
venture out. Prime subscriptions swelled by 50 million last year, to more than
200 million, and alone accounted for around $25 billion in revenue.
Along the way, Amazon has exacted a heavy toll on its
blue-collar workers, vendors and taxpayers — who’ve footed the bill via
incentives for warehouses, corporate campuses and computing centers. Warehouse
workers describe physically demanding and unforgiving jobs that include miles
of walking daily and punishing turnover rates, amid increasing automation. And
while undergoing a historic hiring spree — it’s now the country’s
second-largest private employer — it quashed multiple union drives and pushed
its hourly workers to the brink to achieve Bezos’ dream of near-instantaneous
delivery.
Bezos’ disdain for taxes was a major
reason he established the company in Washington state, which had a smaller
population of buyers at the time who’d have to pay sales tax, giving it a price
advantage over brick-and-mortar rivals. Armed with color-coded maps, company officials
spent years evading state officials lest its customers be forced to pay sales
tax.
Amazon’s yearlong pursuit of a
second headquarters site sent local leaders prostrating themselves before Bezos
for a shot at doling out taxpayer funds to underwrite an expansion the company
could well afford on its own. But it got results — nearly $600 million in
incentives from Virginia officials to build office towers in the Washington,
DC, suburbs.
If such heavy-handed business
practices are to be criticized, they are also the source of admiration and fear
among business leaders, rivals and investors. Even a rumor that Amazon is
entering a new sector can send competitors’ stock prices plunging. And Bezos’
disparate passions have grown weedlike to include Hollywood, banking,
advertising and law enforcement.
Despite his sharp elbows, or more likely because of them,
Bezos made Amazon into a household name and fast, reliable delivery a baseline
for consumers. Many flat-footed legacy retailers are still trying to catch up,
and many more will fall by the wayside. When people talk about the ease of
online buying, they have Bezos to thank.
For better or worse, he remade Seattle, solidifying it as a
tech hub and transforming a former warehouse district into a soaring campus, though
critics would point out that Amazon has contributed to soaring housing prices
and rising income inequities.
In recent years, Bezos’ eye has wandered to side projects,
particularly space. His Blue Origin spacecraft project will launch him next
month, not coincidentally miles away from a host of terrestrial troubles facing
him and Amazon.
The company, to be helmed by a deputy, Andy Jassy, faces
bipartisan charges of anti-competitive practices, skeptical statehouses, a
president critical of corporate power and growing regulatory scrutiny of its
business, including its proposed $8.45 billion takeover of MGM. Unions seem
determined to penetrate Amazon’s warehouses and shipping operations nationwide.
And Bezos himself, like Amazon, has drawn criticism for paying
minimal or no federal income taxes. His mushrooming wealth — now roughly $200
billion — is a flashpoint for critics who say he and Amazon can afford to pay
workers more and contribute more to local infrastructure. His ex-wife,
MacKenzie Scott, has given money away at a torrid pace since their 2019 divorce
while appearing to criticize those who hold “disproportionate wealth.”
Congress has Amazon in its sights, but really anyone who
cares about the concentration of power and wealth should be concerned about the
enormously powerful business Bezos has crafted. Like others, I would like to
think I would shop somewhere local, somewhere small, but Bezos has made online
shopping addictively easy and obscured the very human cost of his rapacious
juggernaut.
So while Bezos floats weightlessly in the cosmos, the
question remains whether lawmakers can ultimately bring Amazon back down to
earth.
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