Their words have been edited and condensed for clarity.Īndrea Leigh (former Amazon business leader for Prime in Canada) The story is told by the rank-and-file employees and the top company executives who built Prime. It’s also a story of how a frankly bland idea - fast shipping - was powerful enough to alter consumer psychology forever. This is the story of how the greatest retail innovation of the internet age was created, in the face of sound logic and reason that suggested it might very well be disastrous. A general View of Amazon India Fashion Week in New Delhi, India, on March 25, 2015.
As of last year, Prime boasted more than 100 million paying members across the globe. Prime members spend more and buy more frequently than non-Prime members do. Others feared that Amazon’s top customers were going to abuse the program and ultimately bankrupt the company with soaring shipping costs.Īnd if it succeeded, Amazon Prime was going to mean big, uncomfortable changes on everything from how managers were evaluated by superiors to how the company fulfilled orders and moved goods from point A to point B.īezos’s instinct, however, proved to be very right. Some managers resented that their projects appeared to be deprioritized for a secret program they knew little about. Need a last-minute gift or nearing the end of a pack of diapers? Amazon was now an alternative to the immediacy of brick-and-mortar stores.īut the idea came with huge risks, and it spurred real tension inside Amazon. That, in turn, forever changed the types of products shoppers were willing to buy online. With it, Amazon single-handedly - and permanently - raised the bar for convenience in online shopping. Jeff Bezos’s letters to customers on the homepage announcing the Amazon Prime and Prime Video launches. “ven for people who can afford second-day shipping, this feels sort of like an indulgent luxury,” Bezos said of Prime, on a call with Wall Street analysts when he introduced the service in February 2005. At the time, Amazon charged customers $9.48 for two-day delivery, meaning if you placed just nine of these orders in a year, Prime would pay for itself. The service, which launched in February of 2005, was a first of its kind: For an upfront payment of $79, customers were rewarded with all-you-can-eat two-day delivery on their orders. And the Amazon Prime membership program is perhaps the biggest reason why. If you were an outsider to both companies and you had to pick one as the future Everything Store, it might have been hard to imagine Amazon as the victor.īut 15 years later, Amazon is worth more than $900 billion, compared to just $33 billion for its old foe eBay, which spun off its (more valuable) payment division, PayPal. Its online rival eBay, on the other hand, was an internet darling worth nearly $33 billion. Rex Rystedt/The LIFE Images Collection/Getty ImagesĪmazon was worth $18 billion at the time. CEO Jeff Bezos in Seattle, Washington in September 1998.
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