I used to be one of Amazon.com’s staunchest supporters, standing firmly behind the Internet bellwether come what may.
But no more. Amazon has flung its virtual doors wide open not only to customers, but also to all products under the sun. And it’s a foolhardy strategy, one that waters down the Amazon brand name and makes turning that proverbial corner onto Profit Street seem less likely.
Amazon has gone from the being the best-known online book and music store to being the best-known online book and music store that happens to sell a lot of other things. The ever-expanding product categories haven’t yet brought Amazon within striking distance of turning a profit, and there’s plenty of reason to question whether they ever will.
Bezos Versus the World
Maybe Jeff Bezos knows something the analysts don’t. He certainly gets points for founding Amazon when he did and for capturing a worldwide customer base.
Sometimes, though, it seems as if Bezos is taunting the analysts and investors who doubt him and his grand scheme for Amazon. In fact, the timing of his latest move — a digital photo shop at Amazon with Ofoto, just as more analysts were lining up to question the product expansion theory — makes you wonder.
Think back to Bezos waving a $1 billion (US$) bill in the face of analysts to show how solvent his company was a few months back, and you get the sense there is something personal here. Question the Amazon model, he seems to believe, and you’re questioning Bezos.
Not so, of course. What’s being questioned is whether a single company can spread itself as thin as Amazon and still be successful. There are legitimate questions about fulfilling orders across a wide range of product categories.
Amazon does books and does them well. The first time I ordered, I was impressed with everything from how quickly they found obscure titles to how tightly packed the books came inside the shipping box.
But subsequent attempts to plumb Amazon’s product array have left me more confused and unsettled. Page after page of electronic products seem to be tossed out for my consideration, but I don’t shop for electronics the way I shop for books, and it’s doubtful that many others do either. Amazon simply doesn’t exert the same kind of authority over TV sets they do over books. They don’t because they can’t.
As for the non-book orders that do come in, do these even constitute good news? Is it wise for Amazon to try to fulfill such a variety of orders? Or will it eat up potential profits by trying to get products to customers in a timely fashion?
Finally, you have to wonder how smart it is for Amazon to expand into markets already well-covered by its competitors. For instance, Yahoo! and America Online both offer digital photo services, making Amazon a decided latecomer to that field.
A Good Name Spoiled?
An ever-expanding Amazon may just ruin Amazon. A brand name is a delicate thing, after all. What Bezos has in “Amazon” is a gold mine, but whether that brand translates across all sorts of products and categories, as he insists, is a completely separate question.
It’s a risk, one that Bezos has proven he’s willing to take and one with great rewards. But the downside is equally great. The old saw urging us to “do one thing and do it well” may be a bit trite, but then again, maybe it’s right on the money.