Amazon UK’s 15th Birthday – what has it taught us?
Fifteen years ago, Amazon landed on British shores and thus started the ecommerce revolution in Britain. eBay didn’t arrive until almost a year later and, even then, buying online (and selling) was alien and slowly-adopted to begin with.
In 1998, Amazon was pretty much just a book seller. Jeff Bezos pioneered the Amazon model in the States and translated it here. And it is surely the publishing industry and book-selling that felt the brunt of it first. Think back to the 1990s and buying books and other media items like DVDs/Videos and computer games. You went to the High Street (HMV, Waterstone’s, Smiths, Virgin and others) and bought them there. Typically for full price. I can recall buying CD albums for £15 and VHS videos for similar sums and more. Books too were seldom less than cover-price, unless in a promo.
Amazon took some years, amid other changes in the industry, to break that stranglehold but the Seattle Start-up was instrumental. By flexing the muscles of its scale and having lower costs than High Street retail outlets it could discount quite heavily and found an easy market. When I see the couriers daily coming by my street, it’s astonishing to note how many of them brandish Amazon packages.
But for many years Amazon was just a retailer. eBay had the person-to-person selling market sewn up. It wasn’t until, say 2005, that Amazon came on to my radar as somewhere viable where businesses could sell too. And it hasn’t opened up to the smallest traders or the private seller yet. It has retained its brand as a retailer.
Now, I think, third-party sales might constitute about 40% of Amazon volume here in the UK (that’s a guess because figures aren’t really available.) But it’s become a vital sales channel for a great many businesses. Many people start on eBay and then move to Amazon. Others just go straight to Amazon and start selling there. But when you sell on Amazon you are absolutely required to meet the Amazon standards.
And it’s Amazon’s mentality as a retailer that has been instrumental in shaping British ecommerce. It has been the pace-setter on customer satisfaction and eBay has responded by cajoling (dragooning?) its sellers to adopt higher standards than might otherwise have been the case.
In particular, Amazon has led the way with delivery times and raised consumer expectations. They do ‘velocity’ very well. I’ll never forget buying my first Kindle and have it arrive at my door 17 hours later. I was blown away with that service (a few years ago!) and now next day delivery is increasingly expected as standard in ecommerce. And Amazon is now pioneering pick-up lockers and same day delivery too. The fulfillment of an online sale is now the key battleground.
And it’s on fulfillment where Amazon is increasingly going to compete. They’re investing heavily in depots and infrastructure. They know the logistics and procedure of ecommerce inside out and they’ve displayed a talent for the long game. And testament to that is the fear they seem to put into UK High Street retailers: big names are always putting the boot in.
What’s next? Who knows. But Amazon ain’t going anywhere and it pays to keep an eye on them.
Just about every High Street had at least one “Bargain Book Shop”. There you could buy New Books probably published two or more years previously that the publisher had sold off cheap. They were usually about half published price. They were called Remainders.
I would also query your list of Book Shops. At the time I would always advocate that you ignore the chains and instead look for a family owned Bookshop especially if you were looking for something out of the ordinary. So if you were into Ancient Egypt or Battleships you stood little or no chance in W.H.Smiths etc but the family owned Bookshop with knowledge gained in depth from many years of Book Selling they might have the book on the shelf but would certainly know where to get it quickly if they did not.
Unfortunately while the W.H.Smiths have generally survived the family owned Bookshop have tended to become extinct. Indeed in many towns there is not a single Bookshop of any kind.
No book store ever held the selection we all wanted back then. And equally the small book trader was dying well before Amazon.
I still use my own indy book store a lot. And not just for buying books. They hold events and readings that I am pleased to support and I like to get specialist titles from them.
They can sort them next day usually. For my money a decent local independent book store can still flourish but it has to be clever.
But Amazon really has done for the big high street chains.
When I was Wholesaling Books I used to regularly call on WHSmiths. At one time the Book Buyer in each branch was a long service very knowledgeable Book Person. One I can remember knew his customers so well that he could tell me which of his regular customers would buy the New Title I was pushing. Indeed he made it clear to me that he would be phoning the customers concerned as soon as he received the books and that he expected that they would call in the shop and buy the book in a couple of days.
But these long service employees were on reasonable wage rates and were pushed out to be replaced usually by 17 year old girls. They on the whole had not got a clue. So instead of sensible orders they would order 3 of everything even of local titles where a dozen or indeed more might be more sensible.
Then the policy changed again and all orders had to go via Swindon. From then on I and many regional distributors were pushed out. Swindon tended to order not on the quality of the Book but on the discount on offer. The higher the discount the more likely it was to appear in WHSmiths. Many small publishers, and some not so small, stopped dealing with WHS because they just could not afford the discounts demanded.
I suspect that this policy reduced the quality of books on sale at WHS and this weakened it when such as Amazon started to take-over the market.
I used to supply several WHS Station Bookstalls. Titles I supplied used to sell in hundreds on the main stations. But WHS pushed us out and I was told it was so they could have larger dumpbins for such as Mars Bars. So I ended up not supplying WHS at all and I only shop at WHS now if what I am looking for I cannot find elsewhere(I always look everywhere else first before I go anywhere near WHS).
Shame, this morning they have a technical issue that has caused all my recent disbursements to my bank account to fail leaving a big money shaped hole in my business :(
I wasn’t sure so I just logged in and checked my first purchase, it was a book in 2002. I was only using dial up at the time and didn’t trust putting my card details into the computer so sent a cheque for payment! How things have changed since then.
Amazon was quite a slow burn in the UK I think, to begin with. Even when I was at eBay 1999-2002, we didn’t think much about them. They weren’t the competition.
I just took a look on both Amazon UK and US and on both sites my earliest purchases seem to be 2001, but I’m damn sure I’d bought stuff before that.
I must have started a new account when I moved house and/or changed card or something.
I notice on Amazon.com I bought a hell of a lot of 10th Kingdom DVDs back in 2001. I used to “import” them and sell them on eBay for silly money :)
Hey Dr Steve,
Lots of sellers did that in the old days. I remember that.
It was quite easy to buy stuff off Amazon and sell it on eBay at a profit because eBay had more of a popular appeal and auctions got better prices often.
I wonder if it’s still possible now? probably but not on such good terms!
30th Jan 2000 – Holding the Zero, Gerald Seymore. Is there a prize for this?
The disbursement issue is a sad way to mark 15 years of trading for poor old Amazon UK.
I must live in a black hole because 90% of my Amazon purchases take at least 10 days to arrive. It’s got so bad that I now only buy on there if I can afford to wait 2 weeks. I would add I only live a mile from the M25 in the NW corner.
It is amazing to see all my purchases from Amazon from 2000 onwards. They must have an amazing sales history on us all. They know things about me my girlfriend doesn’t (ignorance is sometimes bliss).
Not sure if anyone knows this the domain name http://www.amazon.co.uk was actually purchased from a friend of mine, Bob Clayton. Sadly he has now passed away. However his name lives on at the Chesterfield-FC message board which is dedicated to him
Check out Bobs Board
However he would never tell me how much he sold the name for…..