The documentary “Amazon Empire”; These 3 Debates From The Movie Are Influencing Ecommerce Entrepreneurs

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The PBS
PBS
the investigative series FRONTLINE recently published a two-hour report documentary on how Jeff Bezos built Amazon
AMZN
from a small garage business to an unprecedented business empire.

The documentary, available on the Amazon Video streaming service, is aptly named The Amazon Empire, The Rise and Reign of Jeff Bezos and has received mixed reception from entrepreneurs and the general public.

Twenty-two years ago, Amazon launched the third-party seller program; the brilliant idea allowed Americans and eventually other international sellers to sell just about anything on Amazon. With this program, entrepreneurs could start a selling business with so much ease and be presented with ready traffic, which makes it the favorite of most e-commerce entrepreneurs around the world. However, these e-commerce entrepreneurs are increasingly interested in documentaries, and for good reason.

“The film brings renewed confidence in the strength of the platform as well as a sense of caution for sellers like us,” believes Eberths Perozo, a prominent Amazon e-commerce entrepreneur and co-founder of Midocommerce, “ It is truly a pleasure to see how this company has grown from a garage bookstore to a national empire and today to an international conglomerate, what is great is that it has taken with it many many small brands.” concludes Perozo.

The profit versus market share debate

It took 4 years for Amazon to make its first ever profit in the fourth quarter of 2001; a paltry $0.01 net profit was disappointing by any measure, but was enough to convince Jeff Bezos and his investors that Amazon’s ambitious business model could work. It took the company another ten years achieve a net profit equal to its fourth quarter sales.

One of the first things the Amazon Empire documentary explores is where this strategy came from; According to the doc, Jeff Bezos has always been obsessed with giving up profit for market share. Jeff believed in this strategy so strongly that he wrote these famous words in an investor newsletter in early 1997, “It’s all in the long run . “In that letter, he advised his investors that Amazon would not be profitable for very long but during that time they would take market share and build robust infrastructure and systems that would ensure the company remained highly profitable for many years to come.

Bezos’ insight proved trustworthy as Amazon has consistently made a healthy net profit since 2011, propelling Jeff Bezos to No. 1 on Forbes’ list of the richest people. For the past 25 years, Amazon has monopolized the retail space as well as many other aspects of American commerce. However, e-commerce entrepreneurs find it interesting that this strategy has also allowed them to compete in terms of profits with larger and more established brands.

“Amazon is a powerful vehicle,” says Andrés Corona, co-founder of Midocommerce and business partner of Eberths Perozo. “This movie explains why the company has such powerful systems that have enabled us to achieve over $10 million in sales for our customers. It really is a phenomenal machine and it’s quite interesting to see how it all came to life of a stubborn commitment to a strategy.which has insisted on giving up profit for the big picture.As an e-commerce brand which often gives up profit for the sake of our customers or to improve the quality of our listings, it’s refreshing to know that we’re literally in tune with the business.

Midocommerce is an e-commerce brand on Amazon, working with over 100 other customers to automate and manage their amazon stores for a share of the profits while educating hundreds with their courses on how to take advantage of the machine that is Amazon .

The security debate

Another central area addressed by the documentary was growing concerns over the security of Amazon’s third-party seller program. A former Amazon product safety manager, Rachel Greer, admitted in the documentary: “It’s made it easier for companies that aren’t as careful in following the law to start a business, sell products that aren’t tested, cause trouble and disappear.”

Rachel Greer was among several former Amazon employees who voiced strong dissent against Amazon’s policy, which exempts the company from liability for damages or harm caused by third-party sellers’ products.

In the documentary, Jeff Wilke, CEO of Amazon at Global Consumer, answered questions about this concern. In his own words, “the way things work in the United States is that the seller of record is the person who sets the price and buys the product. That’s why for things not sold by Amazon, we tell consumers on who the seller is on the page, so it’s the responsibility of the seller.”

Reactions to Amazon’s position differed from person to person; while aggrieved consumers largely view it as a breach of duty, third-party sellers such as Midocommerce view it as a kind of red flag.

According to Perozo, “I think the fact that many sellers can buy and sell products on Amazon without ever seeing the product makes it very easy to be negligent or insensitive. Knowing that we are legally responsible for what we are selling is what makes Midocommerce a safety-conscious brand. We have implemented a product search system that not only identifies the best-selling products, but also the safest products for our stores and the stores of our customers. For example, we only source well-known American products. We prefer to buy more expensive and safer American products than potentially harmful products from China or other countries.

The power debate

Amazon has been accused in many quarters of retaining divine power over the companies that sell on their platforms. The documentary examined these and other accusations that Amazon’s AWS services, along with the purchase of companies like Ring and The Washington Post, have brought the company to the brink of ushering in a dystopian future much like that of Geroge Orwell in 1984.

The documentary exposed the reality of what sellers on the Amazon platform are facing by exploring the reasons behind Amazon’s refusal notorious stalemate with Hachette, which was once one of the world’s largest publishers. The documentary revealed how this dispute essentially divides Amazon customers (readers) and authors/publishers along battle lines. While the Hachette dispute was later settled somewhat out of court, it set the tone for how Amazon performed by expanding its third-party seller program to all types of goods and industries. The documentary reveals that Amazon has the final say on which accounts go or stay.

Amazon’s list of banned or suspended accounts is growing every day. Yet Amazon argues that these bans protect the platform’s security, as evidenced by the ban on more than 3,000 Chinese sellerss in 2021 for security reasons. However, there have also been numerous complaints from all other parts of the world about a seemingly indiscriminate attitude towards the ban or suspension. A banned account on another platform might not be a big deal, but for massive sellers like Midocommerce, it means losing a million-dollar business empire and potential million-dollar transactions. dollars at any given time.

“It’s scary how much power Amazon has over its sellers. Their phenomenal system attracts a huge segment of global sellers, but then they own the customers and retain a lot of influence, including things like price. Amazon can put you out of business in seconds,” says Perozo.

“The only way around this is to be extremely careful and understand how Amazon works. One of our selling points at Midocommerce is our in-depth knowledge of the platform, we’ve walked the lines, been blasted by landmines and lost money in the past as individual sellers. However, this has prepared us for the brave new world of commerce championed by Amazon, there is no way to fight it now, and we So we’ve built strong systems. So far, Midocommerce has no suspensions and no duplicate accounts or deactivated accounts, which shows how far we’re willing to go to give up a quick profit for the sake of the longevity and safety.

“While we can be proud of our expertise, every e-commerce entrepreneur should watch the documentary and beware of the power Amazon wields.” Andres adds, “It’s a textbook case of empire building on borrowed land.”

Amazon’s growth has been unprecedented in American commerce; As it stands, the company sells almost everything there is for sale, including the documentary “Amazon Empire”, which heavily criticizes Amazon as a company. Considering that the company is now effectively present in all sectors and retains an interest in dominating the space, it becomes interesting to speculate where the company will be in another decade or more.

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