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Originally Posted by GA Russell
Interesting to read, but the company isn't giving any numbers to back up their claims. Why should they be believed?
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Really ...
I've been an Amazon customer (CDs, DVDs, books, .ca, .com and .co.uk) and frankly Jeff Bezos is right when he claims that Amazon is striving to be the most customer-centric company on the planet. There is certainly no other retailer, online or offline, government agency or other consumer service provider I deal with which is better at listening, and delivering, exactly what they are selling. And, standing behind it.
That alone is my personal reason for "why they should be believed".
Amazon figured out from day one that they had to do two things: make it easy to buy from them, and make it easy to fulfill each order -- both from the customer's point of view. There is no other online retailer experience better than Amazon. Search, recommend, review orders, track parcels, create a wishlist, share comments, purchase, get confirmation or make a return ... sorry, but Amazon defines best-in-class and leaves most retailers -- online and offline -- to eat their dust.
Amazon gets it: they are only as good as the last transaction. Customer loyalty is razor-thin and building brand equity is about repeat action, not fancy commercials.
I recommend anyone interested in the current e-book battle read the CNET article linked in the first post. Ian Freed, VP Digital at Amazon, directly answers every question and adds extra details to CNET's David Carnoy's queries -- Carnoy having in the past written less than flattering opinion pieces about Amazon (ie: "What Amazon didn't say about ebooks").
Freed noted: "Some numbers we haven't released before...80 percent of Kindle books we sell are sold to Kindle owners." As he explains, that means 20% of Kindle books are sold to people who do not own a Kindle. That's incredible, isn't it? People are actually paying good money to buy Kindle formatted books to read strictly on Apple devices, Blackberry, Android and Windows PCs. 20% are buying without any Kindle hardware.
Wow.
Freed noted: "And since some of the publishers have decided to price their e-book above $9.99, we've definitely seen a shift of customers going to e-books that are $9.99 or less." Not surprisingly, consumers vote with their pocketbooks. You can only read one book at a time; if the price goes too high,
consumers will read something else till the price comes down. Common sense, and Amazon is confirming it.
Freed noted: "we're pretty sure we're 70 to 80 percent of the market. ... Obviously, from the beginning of Amazon we've been very metrics-focused and we don't typically throw out numbers we don't firmly believe in". The folks who actually DO know the facts -- the major publishers and any anonymous collective data they share through the American Association of Publishers -- will act accordingly as time passes. It's a bit of common sense stretch to believe Apple iBookstore has captured 20% of the e-book market, B&N has done the same with Nook, and, allowing 10% for all the other players ... Amazon is struggling to reach 50%? Well, ok, so we don't actually know. But if Amazon states in public they believe they are in the 70-80% range ... and the one metric we do have is that James Patterson's e-books were 75% sold as Amazon Kindle e-books ... well, Amazon's view seems more credible than others.
When Carnoy claims Amazon doesn't want to be in the hardware business, Freed noted: "I wouldn't actually say that. We really set up the businesses independently. We fully expect our device business to stand on its own. And we think of our device business as device and accessories. But we would expect our device business independent of accessories to be profitable. But normal-Amazon-profitable, which means we try to make it as inexpensive as possible yet make a fair profit." As noted in other threads, it's a dangerous assumption to make that Amazon is selling Kindles "below cost". Their new $139 wifi Kindle, IMO, probably costs $70-$90. If B&N can sell a dual-screen Android/e-ink wifi Nook at $149, what makes anyone think a single screen Kindle at $139 is "subsidized"?
Freed noted, delivering the customer service coup de grāce: "our customer service costs today compared to when we first introduced Kindle are way lower. So when we look at the device business, we look at it all in, with customer support and everything else, and ask whether it's a healthy business. The big thing about consumer electronics is that the more units you sell, the lower the overall cost. The more we sell, the more we can lower the costs across the board, which is what you're seeing with the new Kindles." Which, reading between the lines, explains why Sony has been so reluctant to cuts prices -- it isn't doing enough volume to lower costs.
And this is why Amazon is leading in e-books and e-readers today. They may not always lead ... but competitors need to stay sharp, nimble and well-financed to stay in the game going forward.