In 1995, the year Amazon opened the virtual doors to its online bookstore, the company posted revenue of $511,000—a total that jumped to $15.7 million in 1996 and skyrocketed to $147.7 million in 1997. By 1999 annual sales reached $1.64 billion, and the company began to aggressively implement founder Jeff Bezos’s strategy of adding more products to complement its book offerings. In 1998, Amazon added music and DVD/videos to the mix; in 1999 electronics, toys, home improvement items, software, and video games were added to Amazon’s selection.
Books were Amazon’s largest product category as recently as 2008, but in 2015 their share of the company’s total revenue—which could hit $100 billion soon—is shrinking. As the company quietly marks its 20th year in the book business, executives said that books are still in Amazon’s DNA. “Books are home for us, and we remain committed to providing the best bookstore in the world for our customers,” said Russ Grandinetti, senior v-p, Kindle.
And even though Amazon offers much more than books, the company has been one of the biggest (if not the biggest) innovators the book business as ever seen. From customer reviews to the Look Inside the Book feature and the launch of third-party selling, new Amazon services have often changed industry standards—and they are usually met with some controversy.
For example, before it entered the e-book business, Amazon angered publishers with its aggressive tactics toward selling used books. But the company pressed on and in 2008 Amazon cemented its place as the most important seller of used books when it bought AbeBooks, an online marketplace for used and rare books that was its largest competitor in that market.
Though Amazon can cite plenty of innovations, its most important moment in the book business came in 2007, when the company introduced its dedicated e-reading device, the Kindle, and simultaneously launched the Kindle e-bookstore. Today, e-books are sold in all 14 countries where Amazon operates local stores (print books are available in 12 stores). In addition to the local stores, Grandinetti noted that “we sell both print and digital books to customers in nearly every country worldwide.”
The importance of e-books to Amazon can be seen in a few different ways. Of Amazon’s 20 all-time bestsellers (in any format), only two were originally released prior to Kindle’s 2007 launch. (Another observation from the top-20 list is that all the titles are fiction except StengthsFinder 2.0). Second, in 2011, Amazon customers bought more e-books than print books for the first time, a trend that continues today. Despite an industry-wide slowdown in e-book sales, Grandinetti said Amazon continues to see a transition from print to digital, adding that “our Kindle business is growing.”
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SOURCE: Publishers Weekly