Friday, April 20, 2018
Business

'The Everything Store' unpacks the story of Amazon founder Jeff Bezos

The man behind Amazon — from the distribution center coming to Hillsborough County to the countless packages arriving on our doorsteps — is described as a visionary, ruthless competitor and demanding boss who forever changed the way we shop and read.

He's acutely focused on offering customers everything under the sun at the lowest prices possible. He's also intent on creating human colonies in space.

Jeff Bezos is everywhere these days and not just because we're all clicking his site for Christmas gifts. Last week, Amazon's founder and chief executive officer floated an idea to use drones called octocopters to deliver packages to homes. He also lost a multibillion-dollar fight over charging sales tax on Internet purchases made in New York.

Brad Stone, a Bloomberg Businessweek writer who has covered Amazon and technology in Silicon Valley for 15 years, offers an honest look at Bezos in his new book, The Everything Store. It includes more than 300 interviews with current and former Amazon executives and employees, and several conversations with Bezos.

Amazon didn't actually start as Amazon. Before Bezos named his website after the world's largest river, he considered Awake.com, Browse.com and his favorite, MakeItSo.com, after the command used by Capt. Picard in Star Trek. He registered the company as Cadabra Inc., but decided the magical moniker was too obscure and sounded like "cadaver." Bezos was so fond of Relentless.com, he bought the URL, which still takes you to Amazon.com.

The issue of sales tax has been a consideration since Day One. Bezos, knowing well he only had to charge sales tax in states where he had a physical presence, founded Amazon in 1994 in Washington, rather than more populated states such as California or New York. That way, he'd only have to collect sales tax from a small percentage of customers.

Bezos fought the tax whenever he could but knew the 5 to 7 percent price advantage wouldn't last forever. Strapped state governments were looking for revenue sources; brick-and-mortar businesses were crying foul. Besides, he needed more distribution centers to pursue his next ventures: groceries and same-day delivery.

Like many startups, Amazon went through its growing pains. Early on, when Christmas orders overwhelmed the shipping team, Bezos initiated Save Santa in which every employee from the main office took a graveyard shift at the distribution sites.

"They brought their friends and family, ate burritos and drank coffee from a food cart, and often slept in their cars before going to work the next day,'' Stone wrote. "Bezos held contests to see who could pick orders off the shelves the fastest.''

The book gives glimpses into the distribution centers, known as fulfillment centers or FCs, like the one headed to rural Ruskin. Originally modeled after Walmart's, the warehouses generally employed low-skilled workers for $10 to $12 an hour in places where there were few other good jobs. Theft was a constant problem, resulting in metal detectors, security cameras and guards patrolling the premises. Conditions could be chaotic, Stone wrote, citing instances of knives without packaging flying down conveyor chutes.

For many employees, Amazon can be a "somewhat cruel master,'' Stone said.

Throughout the book, Stone described Bezos as a confrontational, frugal employer known for his occasional insults and "machine gun laugh.'' Employees worked long hours with few perks and average pay buoyed by the opportunity to change the world. Some workers who left suffered from post traumatic stress disorder.

Bezos spent the early years investing heavily in various ventures, some of which failed. For a time, Amazon ran the websites of Borders, Circuit City and other retailers and relentlessly targeted companies to acquire. When Zappos, the online footwear store, didn't want to sell, Bezos launched his own, Endless.com, which offered free overnight shipping and returns. The site lost money and had little traffic but succeeded in forcing Zappos to match offers — and eat into profits.

Ultimately, Amazon bought Zappos for nearly $900 million.

While most consumers associate Amazon with shopping, Bezos insists it's a technology company, not a retailer. Despite vast sales, it has faced persistent criticism about weak profits. Last year, it lost $39 million on sales of $61 billion.

Bezos' fortune is estimated at $25 billion, making him the 12th-richest person in the United States, Stone wrote. That explains his $1.6 million annual security detail for him, his wife and their four children, plus homes in Seattle, Aspen, Beverly Hills, New York City and a ranch in Texas.

His quest for wealth goes back to his dream of getting to outer space. In 2011, he said his space exploration company, Blue Origin, was working to lower the cost of space travel so humans could explore the solar system firsthand.

Much like the attitude he took with Amazon, he said, "Slow steady progress can erode any challenge over time.''

Susan Thurston can be reached at [email protected] or (813) 225-3110. Follow @susan_thurston on Twitter.

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