Photo credit: Jeff Bezos at the Amazon Spheres Grand Opening in Seattle, by Seattle City Council
It’s that time of year again – Spring has sprung, the Easter Bunny has hopped on by, and Amazon’s Jeff Bezos has dropped his annual Letter to Shareholders.
The 2020 missive is significant for several reasons. The letter is Bezos’ first – and presumably his last – since the announcement that he is stepping down as CEO. Effective the third quarter of 2021, Bezos will become “Executive Chair” of the world’s largest marketplace, and hand the keys to the store over to new CEO Andy Jassy.
For Amazon sellers, there’s interesting information in the many statistics shared by Bezos in his letter. Nearly 60% of all Amazon sales in 2020 were made by third-party sellers – the largest proportion to date. This serves as proof to what observant sellers have known all along – the marketplace continues to grow faster than Amazon as a whole.
But then Bezos went even further, and estimated that marketplace sellers made total profits of $25+ billion for 2020, which is more than Amazon’s own net income for the year. Clearly, it’s a fine time to be an Amazon seller. It must be, because Jeff Bezos has decreed it to be true.
A final sermon from Pastor Jeff
Unlike other shareholder letters, this one really has the theme “But wait, there’s more…” written between the lines. Bezos shares some frankly mind-boggling stats about Amazon’s growth over the last year. At no point does he acknowledge the fact that the world was sitting at home locked down and afraid to go to stores during a pandemic, which no doubt resulted in the massive growth spike for all things Amazon.
First the good stuff. Amazon has grown from 614 employees at the time of its 1997 Letter to Shareholders, to hiring 500,000 employees in 2020 alone. There are now 1.3 million people working for Amazon. Let that sink in a moment. It’s roughly the same as the combined populations of Alaska and Vermont. And with the recent trend of Amazon buying disused shopping malls to turn into giant new fulfillment centers, this will only increase further.
Then there’s the, well, odd stuff. Bezos goes on a bit of a rant discussing how much value Amazon has created for everyone – shoppers, employees, Prime subscribers, sellers, shareholders. It gets a bit patronizing when he includes a letter from a couple who thank him for changing their life with two shares they bought back in the day.
Then, it turns into a digression on his philosophy of life – how “you have to pay a price for your distinctiveness, and it’s worth it.” There’s also a lengthy bit about the new plan to make Amazon “Earth’s Best and Safest Employer”, as well as a long passage on Amazon’s efforts to deal with the inevitability of climate change.
By the time the letter reaches the sign off, we’ve reached the fervor of an old-school sermon:
To all of you: be kind, be original, create more than you consume, and never, never, never let the universe smooth you into your surroundings. It remains Day 1.
Or, if you’re a fan of Mel Brooks classic comedy films, the moment in History of the World, Part 1 where Moses descends from the mountain with the 15 Commandments.
Either way, Bezos has gone out with a bang, and it will be fascinating to see where Amazon goes from here. One thing is for sure, new CEO Andy Jassy has a difficult act – and shareholder letter – to follow.
Read more at About Amazon.
Amazon news
Amazon removes the last morsel of customer details
Imagine, if you will, a marketplace where $300 billion dollars of products are sold to customers by third-party sellers. For all practical purposes, those customers exist only as anonymous numbers and metrics to the sellers who serve them.
This is not The Twilight Zone, it’s Amazon, where FBA sellers will no longer have access to any identifying customer details as of April 8, 2021. Says Amazon, “the Amazon Fulfilled Shipments report will no longer include Amazon Customer name and street address.”
Sellers who do their own fulfillment will still have access to this data, because otherwise they wouldn’t be able to ship their parcels, but FBA sellers won’t. It’s a blow for enterprising marketers who used the information for Facebook Ad retargeting and direct mail promotions. While customer data has become more and more limited since 2016, more than a few sellers used what was available to skirt Amazon’s ban on marketing directly to buyers.
Customer information will still be available to US FBA sellers via the Amazon-Fulfilled Shipments – Tax Remittance report. However, using the information contained within for anything other than tax purposes is strictly forbidden.
At this point, it’s difficult for entrepreneurial FBA sellers to have a true feeling of agency about their business. Amazon has made it clear that the customers are theirs, not yours. And so is all the customer information – unless, of course, you choose to sell dangerously.
Read more at Marketplace Pulse.
Prime Day might come as early as June
Along with annual shareholder letters, one of the other great Amazon rites of spring is speculating on when the next Prime Day sales event will be held.
