Our vision is to use this platform to build Earth's most customer-centric company, a place where customers can come to find and discover anything and everything they might want to buy online.[1]
Topic map
Numbers
Comparisons
| Metric | Prior | 1999 | Δ |
|---|---|---|---|
| Sales | $610 million (1998)[7] | $1.64 billion[8] | 169 percent increase[9] |
| Cumulative customer accounts | 6.2 million (prior year)[10] | 16.9 million[11] | |
| Repeat customer order percentage (Q4) | over 64 percent (Q4 1998)[12] | greater than 73 percent[13] | |
| Worldwide distribution capacity (end of 1999) | roughly 300,000 square feet (start of 1999)[14] | over 5 million square feet[15] |
As reported (1999)
| Metric | Value |
|---|---|
| New customers added | 10.7 million[16] |
| Sales outside the US | 22 percent[17] |
| International sales | $358 million[18] |
| Holiday quarter revenue growth | 90 percent[19] |
| Holiday orders shipped on time | well over 99 percent[20] |
| Annualized sales | over $2 billion[21] |
| Inventory required | $220 million[22] |
| Fixed assets | $318 million[23] |
| Cumulative operating cash used over five years | $62 million (last five years)[24] |
| Total customers at start of 2000 | 17 million customers[25] |
Notable quotes
the current online shopping experience is the worst it will ever be.
We have a market-size unconstrained opportunity in an area where the underlying foundational technology we employ improves every day. That is not normal.
this remains Day 1 for e-commerce, and these are the early days of category formation where many customers are forming relationships for the first time.
no other company has ever grown 90 percent in three months on a sales base of over $1 billion.
the quality of customer experience a partner delivers is the single most important criteria in our selection process – we simply won't build a partnership with any company that does not share our passion for serving customers.
Lessons
- Often, the best way to drive one of these is to deliver the other.[31]
Capital actions
Entities mentioned
Prior predictions revisited
- ✓ 1998: “We predict the next 3½ years will be even more exciting.” — The 1999 letter reports 169% sales growth, 10.7 million new customers, and a massive distribution expansion, strongly validating the excitement prediction.[33]
- ≈ 1998: “We are working to build a place where tens of millions of customers can come to find and discover anything they might want to buy online.” — By end of 1999 Amazon served 17 million customers, crossing into the tens of millions in just one year; Bezos reiterates the same vision verbatim, now describing reality rather than ambition.[34]
- ≈ 1998: “We plan to invest aggressively to build the foundation for a multi-billion-dollar revenue company serving tens of millions of customers with operational excellence and high efficiency.” — Scale hit ($2B annualized sales, 17M customers); operational excellence still aspirational as Amazon 10×'d fulfillment capacity and expanded into new sub-scale categories.[35]
- ✓ 1998: “This latest addition will more than double our total distribution capacity and allows us to even further improve time-to-mailbox for customers.” — The 1999 letter reports distribution capacity grew from roughly 300,000 square feet to over 5 million square feet in under 12 months, far exceeding a doubling.[36]
Predictions
- In the coming years we expect to benefit from the continued adoption of online commerce around the world as millions of new consumers connect to the Internet for the first time. (medium)[37]
- the current online shopping experience is the worst it will ever be. (long)[38]
- Increased bandwidth will result in faster page views and richer content. (near)[39]
- Further improvements will lead to "always-on access" (which I expect will be a strong boost to online shopping at home, as opposed to the office) and we'll see significant growth in non-PC devices and wireless access. (medium)[40]
- we expect to deliver substantial margin improvement and cost leverage as we drive continuous improvement in our partnerships with suppliers (near)[41]
- the time to profitability for each business should, in general, continue to shorten. (medium)[42]
- Our customers and shareholders around the world can look forward to further geographic expansion from this base during the coming year. (near)[43]
vs. 1998
Added: Six explicit goals for 2000 (growth, product expansion, operational excellence, international, partnerships, profitability)[44] · Platform tipping-point framing[45] · Drive toward profitability as an explicit goal[46] · Partnership program expansion (e.g. drugstore.com)[47] · Wireless and non-PC access as growth driver[48]
Dropped: Hiring bar as the single most important element · Fight entropy in hiring
Moved: Long-term investment philosophy as primary focus → Long-term philosophy referenced via 1997 letter appendix; near-term profitability goals now foregrounded[49] · Capital efficiency as emergent observation → Capital efficiency quantified and cited as structural advantage[50]
Anecdotes
- At a Stanford University event, a young woman asked Bezos what she actually owned as a holder of 100 Amazon shares, prompting his articulation of the Amazon platform concept.[51]