The key, Bezos decided, was to sell products in so many formats that no single place could offer them all. He drew up a list of 20 possibilities, including magazines and PC hardware and software. But he settled on his early love: books. Even the biggest physical bookstore can't purvey more than a fraction of the 50,000 books printed every year. But a virtual bookstore could, in theory, offer every book in print. Bezos decided to call his bookstore Amazon--a mighty river of text. With the Web address www.amazon.com, it opened in July 1994, offering more than a million books. (It now offers more than 2.5 million.)
Physically, Amazon is about as different from Powell's as it can be, while still being a gigantic independent bookstore. Whereas the City of Books in Portland has the down-home atmosphere of an old country barn, Amazon, in downtown Seattle, is based in a modern office building. Actual for-sale books are nowhere in view. The Amazon office is characterized instead by the paraphernalia of rapid business expansion: cardboard boxes stacked in hallways, cables draped across the carpet, desks made out of doors and two-by-fours.
In marked contrast to Powell's, Amazon stocks only several hundred top-selling titles, all of them in a warehouse in south Seattle. The store functions almost entirely as an intermediary, taking customers' requests on its Web page and pumping them to distributors, who fill the orders. The books are shipped back to Amazon; from there they are sent out to customers.
Bezos believed that Amazon would not succeed unless people enjoyed visiting its Web site. "We had to make it a destination," he says, "the way any enjoyable store is a destination." Which meant, in a sense, providing as close to a Powell's-like experience as he could in a medium that is inherently slow and tedious. Amazon's Web site cannot provide a cafÉ, friendly clerks, or satisfyingly overstuffed shelves. It doesn't even offer fancy graphics and animation. But it does provide a simple (by Internet standards, anyway) tool for searching its catalog, amusing contests, chatty lists of best-sellers and award winners, interviews with authors--and up to a 40% discount on books reviewed in the New York Times Book Review, the New Yorker, and other publications.
Amazon also provides services that regular stores don't. People who search for a book at the Amazon site often find a description accompanied by excerpts from reviews--not only from print sources but from customers. Authors, too, are invited to comment on their own works. And Amazon asks customers which kinds of books they like. When books in the same category or by the same author appear, the company sends E-mail inviting people to buy them.
To put together the business, Bezos faced the difficult problems of assembling reliable, user-friendly software and negotiating with the book industry's hundreds of distributors and publishers. But perhaps his greatest worry lay in another direction. Like Michael Powell and independent bookstore owners everywhere, he was peering over his shoulder at Borders, Barnes & Noble, and the other giants. The chains, too, had the muscle to deal with all the distributors. They, too, could offer every book in print. Whereas Powell's could distinguish itself by offering a unique range of wares, Amazon could not. Thus Bezos had to rely on the ancient strategy of getting there first, with the most to offer.
"Most people remember two or three brand names for any given product," Bezos explains. "In shoes, there's Nike, there's Reebok, maybe Adidas, and then there's everyone else." In the real world, he argues, the problem can be avoided to some extent, because when customers go to a store with an unfamiliar name, they can see merchandise in the windows and lines of cash registers inside. But because no Web page can provide that tangible reassurance, brand names are especially important in on-line commerce. Customers are likely to visit the two or three sites they know, rather than try to find and evaluate new ones. As a result, Bezos says, "I thought, Well, Barnes & Noble and Borders will set up Web sites, and everyone already knows their names. So that leaves maybe one open slot for everybody else on earth."
To secure that slot, Bezos had to work fast: he was by no means the only budding literary cyberspace entrepreneur. To break free of the pack, he turned to venture capital, a business tool more common in Silicon Valley than on publisher's row, and he didn't get rolling until he had a kitty of "a few million dollars." When order money began to come in, he plunged it back into merchandising, advertising heavily both on Web sites like Slate, the electronic magazine from Microsoft, and in print publications like the New York Times Book Review.
The strategy worked. Sales in the first couple of years of Amazon's existence rocketed from zero to $15.7 million last year. And in the first quarter of 1997 alone, sales reached $16 million.
Amazon's success has been so complete that the inevitable questions have been raised by virtually everyone who thinks about the book business: Does the convenience of ordering books on-line doom the physical bookstore? Or do the old and new ways of doing business complement each other?
