Michel Vuijlsteke's weblog

Tales of Drudgery & Boredom.

Lessen van Amazon

Knippenplak van bij meneer Wroblewski, een paar stukken uit een presentatie van Jared Spool.

Spool is een fijne mens om naar te luisteren, en hij heeft altijd een resem anecdotes/lessen die grappig zijn om te herhalen.

Over de reviews bij Amazon:

  • Originally, Amazon reviews were stored chronologically. So latest was always on top. Fixed this problem with “was this review helpful?” question. Amazon community now curates reviews. This feature has been worth 2.7 billion dollars to Amazon (through derivatives research).
  • Lots of people go to bad reviews first to convince themselves not to buy something.
  • Be careful when you emulate features. Target went out and bought the Amazon reviews platform. Their reviews are either missing or very negative. Why?
  • When the new Harry Potter book came out, Barnes & Noble/Wal-mart got 300+ reviews. Amazon got 1,805. Target got 3.
  • On Amazon, one out of 1,300 purchasers will write a review. To get 20 reviews, 26,000 sales needed. If you have a 2% conversion rate (typical for e-commerce), you need 1.3 M customers for 20 reviews. That’s why Target has so few reviews.

Over boekhouden bij Amazon:

  • [You c]an buy an iPod at Apple, Target, Best Busy for 149 dollars. Amazon sells it for 133 dollars. [They c]an sell everything at cost and still make money.
  • Negative Operating Cycle: Amazon turns (sells out) its inventory every 20 days. It takes other retailers 74 days (Best Buy) Standard retail payment terms are 45 days.
  • On day zero, Best Buy orders inventory but has to pay on the 45th day. From the 46th day to the 74th day, they are in cash debt and often have to borrow money.
  • Amazon still orders on day zero and pays on day 45. But they are sitting on cash until they have to pay the bill. This means they earn interest on the money they have in the bank. So Amazon floats cash vs. cash debt.

Ayup. Amazon is niet verkeerd bezig.

1 Comment

  1. Interesting stuff! Wat die reviewer-ratio betreft: ik denk wel dat die soms bij kleine, gespecialiseerde shops een pak hoger kan liggen – hoe groter en ‘onpersoonlijker’ de site, hoe minder rap mensen gaan reviewen, niet? Amazon heeft wel het voordeel een ‘positieve’ community te hebben..

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