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Amazon: A Search Engine With A Warehouse
from the rethinking-commerce dept
Clay Shirky made an offhand comment on Twitter recently that's way too good to leave to just the Twitterverse and not expand upon (hopefully Shirky himself will expand upon it -- but in the meantime, you're stuck with me). In commenting on a chart showing how Amazon seems to be growing while the rest of retail is shrinking, Shirky notes "AMZN's growth happens because its not a retailer with a web presence, its a search engine with a warehouse."
This needs to be unpacked in a few ways, but it's such a unique insight that it deserves lots of attention. Many people look at Amazon and think that it's just an "online store," but the reason that Amazon works is not because it took the concept of a store and put it online, but because it has always done things that only the internet allows it to do. That is, from its very early days, Amazon was never just about about being a store in a web browser, but in using the web to do interesting and unique things built on top of a commerce core. Things like online user reviews and recommendations may now seem commonplace, but Amazon revolutionized them. And it added so much convenience that many people now use Amazon product pages as default info pages on a product -- I know I do. To me, Amazon isn't just a store, but it's a database of products and reviews -- and that's what Shirky's getting at in saying it's a "search engine with a warehouse." Of course, the cool thing is that when you start thinking about Amazon in those terms is you realize how much more it can do. Those who think they're retailers are going to keep missing where Amazon is heading unless they start thinking the same way.
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warehouse
And it's not even that big a warehouse. The core premise of Amazon as a bookseller was that they could just keep reordering books as needed, keeping a few hundred copies instead of thousands of copies on hand of most titles. Turns out having too few warehouses hurt fulfillment early on, so they built more, but the premise remains.
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Amazon's API
One thing that I appreciate about Amazon's openness and interoperability is how much value it can add to other products. MediaMonkey (my preferred library organizer) uses it to acquire proper track listings and album art. It also has a tie-in where you can order music through Amazon and I think a small amount is kicked back to the MM developers.
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A search engine that remembers
A lot of the convenience of Amazon is that it remembers who you are using your browsing history, buying history, wish lists, shipping/billing addresses, payment info etc.
Users also curate the reviews. I remember this really good article a while back on the value of its 'was this review helpful for you?' feature: http://www.uie.com/articles/magicbehindamazon
All of these things makes it even more than a search engine because it's no longer purely transactional like Google.
Online news could be served the way Amazon serves/recommends/curates product information.
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Not to mention the 'authority' of the Amazon name. I've purchase things from stores that I've never heard of and never would have trusted because they have an Amazon store. I've never had a bad experience with them. I can't say that of most brick and mortar stores...
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third party sellers
The nicest thing for me is they allow others to sell their goods right from those same "search results" pages. I almost always find the lowest price for anything there.
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Amazon is ebay and a retailer in one.
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A powerhouse
I headed supply chain for a European wine retailer 10 years ago. Our and Amazon's problem then was that supply chain costs (warehousing, transportation, systems, customer service) were higher than our profit margins so that every sale pushed us deeper and deeper in the red.
I don't recall exactly how long it took Amazon to actually make a profit and I'm not sure is has yet recouped all its costs since it's start up days but I admire their success. As a frequent user of their services, I feel confident that my product will be delivered when promised and that my overall cost will likely be the lowest or very close to than anywhere else, on the web or not. Impressive!
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Search Engines in Retail
Doesn't it seem almost all brick-&-mortar retailers are missing the boat with a inventory search and ship-to-store shopping option. That would be my ultimate shop ! Now you have an overpriced (shipping) online option with a product clueless storefront. Also, that would create stores that may actually carry lines of merchandise - so you could buy something like pants you like one day and when you need another pair you could buy some more. What a concept !
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Cluetrain
What I like the most about Amazon's user reviews is that it fills in the (huge) gaps the product makers leave in their product descriptions.
When descriptions, and box labels don't describe all of a products benefits, and none of its weaknesses, the Amazon reviews offer a smattering of both. This helps me greatly in choosing between competing products.
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seriously?
I have a horrible time finding exactly what I want using Amazon's own search function. A while back I clicked on a Yahoo! search link to a gamepad on Amazon. As i navigated around looking for other deals, I wanted to go back to the original page because it had been the cheapest one. For some reason I could not go "back" to the page in my browser, and it did not show up in history, so i searched for "xbox 360 wireless controller" and several variations thereof. I could not find the original page. I finally went back to yahoo! and it was the first search result.
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Actually, Amazon is a warehouse with a search engine. The search engine would be just another search tool without it.
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This may not be true for all, but I know it is true for me...
Amazon is the ultimate "impulse-buy" store...
It started when they were offering DRM-free mp3s, and now I have to keep myself from going on Amazon for media, especially with the "new and used from $__.___ feature. Every time I hear a single song or see a clip of a movie, I find myself hovering over the "___ new and used!!!" button.
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a search engine withe a warehouse
thanks for that information buddy
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It does show the vision of Amazon's management and how dead on the money they were.
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