From humble beginnings to the global retail giant’s quirky inner workings, here we reveal the most fascinating secrets about Amazon you won’t believe!
Bezos’ Humble Beginnings
Started from the bottom and now he’s here! Like tech companies that come before, Amazon founder Jeff Bezos’ also began his business in the garage of his home in Bellevue, Washington. To this day, the house still has an oversize mailbox installed by Bezos to accommodate all of the mail the fast growing business received daily.
After hearing the original name of the future online company, you may have thought that they were selling magic supplies! Amazon was originally supposed to be called Cadabra, as in ‘Abracadabra.’ The idea was quickly scrapped after Bezos lost interest in the magical sounding name and several people misheard it as ‘cadaver’. We’re not sure how anyone got cadaver from Cadabra, but we’re just glad that they decided against the original idea, and to play it safe instead.
Before Bezos decided on the name Amazon, there were several other proposed names including MakeItSo.com (after Captain Picard’s frequent command in Star Trek), Browse.com, Awake.com, and also Bookmall.com. Another name that Bezos liked was “Relentless,” and if you type relentless.com into a web browser, it will actually redirect you to Amazon. Bezos chose Amazon because the name suggests scale and website listings at the time were alphabetical. The company launched its website with the tagline “Earth’s biggest bookstore.”
Out Of Stock
Here’s Bezos in his happy place, surrounded by a massive pile of books, or as he saw it, money! When Amazon first went live, the website only sold books. Back in the day, Amazon’s book distributors required them to order at least ten books at a time, which they couldn’t afford. So every time a customer’s order needed to be filled they would order the one book they needed, and nine copies of another book, which was always out of stock.
The Sound Of Victory
There’s no sweeter sound than the Amazon money bell. According to author Jeff Stone’s new book, in Amazon’s early days there was a ritual which involved a whole lot of noise. Every time someone made an online purchase a bell would ring throughout the office. Within a few weeks, they had to remove the bell which was installed in the office because sales were happening so frequently, proving that not all problems are bad.
Raking In The Cash
There’s no denying that Bezos had big hopes and tons of certainty regarding the success of his small business, but within his first week, he was even surprised by Amazon’s progress. By the end of its first official week, Amazon had taken in over $12,000-worth of orders. That meant serious profit for the budding businessman and perks for his prized employees, which were very few at that time. You could say that Bezos was living the entrepreneurial dream.
Making The Cool List
If you believe in yourself, others will too, and if you don’t believe us, just ask Jeff Bezos. Only three days after launching the website, he got an email from Jerry Yang, one of the founders of Yahoo!, asking him if he’d like Amazon to be featured on Yahoo!’s What’s Cool page. Bezos agreed to the honor, and orders skyrocketed immediately after Yahoo! put the site on the list. Sometimes it does pay to be on the cool list.
At the time of the launch, the site wasn’t entirely finished, which resulted in a huge programming error. This snafu was one that allowed sneaky customers to trick Amazon into sending them money. All you had to do was order a negative quantity of books and Amazon would credit the money directly back to your credit card. Unfortunately, many people caught on to this and seriously cashed in. But don’t get any ideas, this error has already been fixed.
During Amazon’s first month in business, it had already received book orders from customers in 50 U.S. states and 45 countries across the world and has continued to grow. The exceptionally high initial demand for Bezos’ book selling services was absolutely shocking. Bezos took this high demand and created an even greater supply to match. Amazon now sells everything from toilet paper to television sets in countries all over the world and shows no signs of slowing down their progress.
Battle Of The Book Giants
Amazon knew how to keep its friends close, but it’s enemies even closer. In the early stages of the company, Jeff Bezos, his wife MacKenzie, and Amazon’s first-ever employee Shel Kaphan would hold business meetings inside their local Barnes & Noble bookstore. But the competition didn’t end there. Barnes & Noble sued Amazon, in 1997, alleging that Amazons 1990 slogan ‘Earth’s Largest Bookstore’ was a false claim. The two eventually settled out of court and Amazon continued to use their slogan.
Amazon’s practice of hiring many seasonal workers originated after the insane Christmas holiday season of 1998. The company was so dramatically understaffed, that employees were working around the clock even bringing in their family and friends to meet the demand. To ensure this would never happen again, Amazon created 100,000 seasonal positions across its US network of fulfillment and sorting centers. This number doesn’t include the 40,000 extra slots across its European Fulfillment Network. It’s safe to say that with Amazon your gifts will arrive on time!
Although Amazon’s usual amount of employees doesn’t match its unbelievable number during the holiday season, the e-commerce company still has an incredible amount of employees working for them on a regular day. Their stock and warehouses are like a beehive always buzzing with productivity. Today Amazon has more than 117,000 employees worldwide and shows no signs of stopping its rapid expansion. It’s safe to say everyone needs to step up their game, because that’s more than even Microsoft employs!
Working On A Football Field
If you thought the number of people they employee was impressive, then you’ll be blown away by the size of Amazon’s gigantic warehouses. Amazon’s fulfillment center in Phoenix, Arizona, is made up of 1.2 million square feet! Many of Amazon’s other hubs are so large that one former employee said that he walked for a total of 11 miles per shift! To put that in perspective, that’s the equivalent of 28 football fields. You can even take an hour-long tour around it if you like.
Robots Lend A Helping Hand
To help take the burden off its warehouse workers, Amazon now uses robots to assist in retrieving items. The robots were made by Kiva Systems, a company which Amazon acquired in 2014 for $775 million. These efficient robots allow more products to be packed into a tighter space. They also make stacking and picking easier by automatically bringing empty shelves over to packers or the right products over to pickers. Watching man and robot work side by side in harmony is truly remarkable.
For Amazon, savings are more than just a competitive matter as the company holds “frugality” up as one of 14 leadership principles. This principle dates back to 1994 when CEO Jeff Bezos started the e-commerce company and made a desk out of a wooden door. “Door desks” became a staple within the growing company even years after it went public. Amazon still hands out the “Door Desk Award,” a title given to employees who implement thrifty ideas.
What better way to pinpoint your potential buyer than with rogue marketing right? Bezos really had the right idea when he decided to go undercover promoting his product, which was books, in places where people were selling the same product for more money. During Amazon’s first year, Bezos hired multiple mobile billboards to drive by Barnes & Noble bookstores boldly displaying the simple question “Can’t find that book you wanted?” along with Amazon’s website address.
During Amazon’s early days, Jeff Bezos got employees pick out the 20 strangest book titles sold every week and awarded a prize for the weirdest. While this may seem like an unusual work practice, it sure got employees excited. Some of the winners included Training Goldfish Using Dolphin Training Techniques and How To Start Your Own Country. While we’re not Amazon employees or anything, we’re sure this little gem we came across would win a prize for something.
Before Kindle There Was Fiona
Forget paperback books! Or hardcover for that matter because now we have the Kindle! However, the electronic reader was not always known by this name. In it’s developmental stages, the Kindle was named “Fiona” after a character in The Diamond Age by Neal Stephenson. In the book, Fiona possesses a machine that holds all libraries and human knowledge. Developers found the name so appropriate that they lobbied to make it the device’s actual name, but Bezos preferred Kindle, and so it was.
Seven Years In The Making
Amazon as a company has a lot of experience with patience and slow growth. Despite boasting big sales and a healthy customer base, it took the internet company almost seven years before it started making any real money. It was January 2002 before Amazon reported its first profitable quarter, making a modest $5 million, which is what the company now makes in almost an hour! As the old saying goes, slow and steady really does win the race.
Even The CEO Works In Customer Support
Two things Amazon has down to a science is providing optimal customer service and making sure everyone in the company shares the same goal of making the customers happy. Because of this, every single Amazon employee is required to spend at least two days every other year working at the customer service desk, including CEO Bezos! We think this is a great way for all employees to get to know the people who are really paying their salaries, the customers!
An elderly woman once sent an email saying that she loved ordering books from Amazon but had to wait for her nephew to come over to tear into the difficult-to-open packaging they came in. Proving just how seriously he takes customer service, once he heard about the complaint, Bezos had the company’s packaging completely redesigned immediately. Now anyone can tear open their newly designed durable paper packaging. If only all online stores cared this much about their customers.
What’s most striking to us about Amazon is not just the sheer size of the site as well as its revenues and reach, but the pattern of it’s buyers. Each of the site’s unique visitors is extremely valuable compared to other online retailers. According to recent spending reports Amazon’s users are five times more valuable than eBay’s. Amazon’s average customer brings in about $189 every year while eBay’s brings in just $39. Not bad for a garage apartment startup that sold books.
One Click Buying!
Thanks Amazon, for allowing us to say goodbye to shopping carts and hello to one click buying. The company got hold of a patent on 1-Click buying in 1997 and even licenses it out to Apple. This means that every time you buy something on iTunes with 1-Click, Amazon is cashing in. The patent forbids any other online retailer from using a one-click purchasing option without paying a royalty to Amazon. The feature was called “probably the most memorable example of an unoriginal software patent.”
Money Down The Drain
Time is money, so when Amazon’s website went down on August 19th, 2013 around 1.p.m Pacific time, they lost a lot of it. While their website was down for approximately 40 minutes, the online retailer lost out on around $4.8 million of potential sales. That’s a shocking loss of $120,000 per minute! The outage affected Amazon’s main website for all U.S. and Canadian visitors and was due to unknown causes. Luckily they got it together quickly to resume business as usual.
Life After Amazon
While it’s understandable to feel bad for Amazon’s leftovers, we ensure you that there’s no need to have pity on their souls or their pockets, as they’ve gone on to make tons of cash from other ventures. One example is Hulu’s Jason Kilar, who is on the board of directors for DreamWorks Animation and worth around $40 million! Quora’s co-founder Charlie Cheever has also gone on to become even more successful with a net worth of around $300 million!
A Very Important Customer
Amazon proudly counts the CIA as one of its customers, after it secured a $600 million deal with the prestigious agency in 2013 for cloud computing storage, which is part of Amazon Web Services. The CIA decided to step aboard Amazon’s cloud, because it was cheaper than a self-built solution, and allows agencies to share information and services with much more ease and speed. This also helps to avoid the kind of intelligence gaps that preceded the Sept. 11, 2001 terrorist attacks.
Cute Company Mascot
Amazon’s Seattle site has a building called Rufus, which was named after a Welsh corgi who was the pet of an employee. The dog liked to attend team meetings and became something of a company mascot. And if you didn’t think Rufus’s reign could get any cuter, there’s also a superstition that Rufus had to tap his paw on the keyboard to launch a new feature on the website. Maybe that was the real secret to Amazon’s success.
A Penny For Your Thoughts
Bezos was notorious for making controversial business decisions but his call to allow customers to post their own book reviews on the site (positive or negative), really rocked the boat. Bezos said, “I started receiving letters from well-meaning folks saying that perhaps you don’t understand your business. You make money when you sell things. Why are you allowing negative reviews on your Web site? But our point of view is [that] we will sell more if we help people make purchasing decisions.”
Throughout the years, Amazon has created quite the impressive portfolio after buying out several successful companies, including Audible, IMDB, Twitch, and even The Washington Post in 2013 for a casual $250 million. But the company really made waves when Bezos made the executive decision to acquire the popular online shoe and clothing retailer, Zappos for a whopping $1.2 billion! While we’re sure this isn’t the last of Bezos purchases, we’re glad both companies decided to tie the knot. Only time will tell what other companies Amazon will acquire.
It Pays To Quit
In an effort to reduce the number of unmotivated warehouse employees at its fulfillment centers, in 2014, Amazon began a “Pay to Quit” program. If a worker hands in their resignation, they’ll get paid a pretty penny. When the program started, Amazon was offering employees up to $3,000 to throw in the towel, but now the amount has increased to $5,000. Less than 10% of the first wave of staffers who were offered the deal actually took them up on it.
23 Minute Deliveries
Amazon takes speedy delivery to the next level! Like most Amazon lovers know, Prime has the power to change the lives of online shoppers everywhere. During the same-day Prime, service was launched in Manhattan, New York; the company claims one customer got their item, which was an Easy-Bake Oven, in a record 23 minutes! We don’t know what they had to bake, but it was clearly critical if they had to have it on the same day! Nothing beats Amazon Prime delivery.
Cyber Monday Cash In
On Cyber Monday-or as it’s known in America “Don’t let your boss see you shopping” day- 2014, Amazon had incredible sales (as per usual) and sold more than 300 items per second. Although Cyber Monday started out as a one-day online shopping marathon the Monday after Thanksgiving, for retailers, like Amazon the event has morphed into a week-long event of shopping opportunities with the icing on the cake for many shoppers being those two little words – “free shipping.”
The Truth Behind The Logo
Unlike the logos of other online retail giants, the meaning behind Amazon’s logo is quite meaningful and heart warming. Putting a smile on your dial since the logo was created in 2000,
the simple design was set up to depict a smile that goes from A to Z. It also means to convey the message that Amazon can help you find anything you need all the way from an Apple Watch to a zebra, a stuffed zebra that is. They’re not selling livestock yet.
Two Pizza Team
Bezos wanted a decentralized, even disorganized company where strong independent ideas would prevail over complicated groupthink. As a company-wide rule, Bezos instituted the concept of the “two-pizza team.” This means that any team within the company should be small enough that it could be fed with two pizzas. We hope pizza is often involved for these employees. The Amazon founder is a fan of simplicity and conservation, so it only fits that he applied these principals to the teams within his company.
Blowing Off Some Steam
The festive period can be an incredibly stressful time for Amazon’s logistics team, and no one knows that better than Jeff Wilke, Amazon’s operations manager. In the early 2000s, during the hectic holiday season, Wilke would let any person or team who accomplished a significant goal scream into the phone at him at the top of their lungs. He said that some of the screams blew out his speakers giving a whole new meaning to the phrase, let it go.
Here Bezos appears calm and tranquil to the untrained eye, but the CEO is said to be a very tough boss who doesn’t shy away from exploding at employees. Author Jeff Stone interviewed employees who alleged that Bezos said things like “This document was clearly written by the B team. Can someone get me the A team document? I don’t want to waste my time with the B team document” and “Are you lazy or just incompetent?” Ouch!
A Humble CEO
Despite being Amazon’s CEO, Bezos only makes $81,840 per year. But before you feel bad for him, it should be mentioned that he owns almost 87 million shares in the company valued at $23.5 billion. This makes him the 20th richest person in the world, a billionaire with a net worth of around $34.8 billion. And although he’s completely loaded, you won’t see Bezos riding around in a flashy car. Instead, he opts for a more humble and understated 1996 Honda Accord.
One customer service manager recalled that when her staff got a week and a half behind in answering emails, Mr. Bezos called her to complain. When she explained to him they couldn’t work any harder; he came up with a solution: The team dedicated one weekend to competing to see who could answer the most emails. During that period, everyone worked at least 10 hours beyond their regular shifts, and each person was given $200 for every thousand messages he or she answered.
Former Vice Presdient
We should all be very thankful that some people made the leap and quit their day jobs, like Jeff Bezos. In the summer of 1994, Bezos quit his stable job in New York as a vice president at D.E. Shaw, a financial-services firm. Bezos and his wife, MacKenzie, moved to Seattle to take advantage of the explosive growth of the Internet and to start Amazon. Their first rental was a three-bedroom house in the suburb of Bellevue, which cost the couple $890 a month.
Nod To Shop
If you thought Amazon had already broken through all the barriers, they have a lot more innovations up there sleeve. Amazon’s new patent is called ‘Movement recognition as input mechanic,’ and will allow you to make a purchase simply by nodding your head at your computer, cell phone, or Kindle. And it doesn’t stop there. You may also be able to indicate how many items you want to order by holding up fingers. While this all sounds very exciting, it’s also a tad bit scary.