A final word before Bezos blasts off

In over a decade in which I’ve covered Amazon, one conversation stands out as neatly summarizing the ethos of the e-commerce giant under Jeff Bezos, who will step aside as CEO next month. An Amazon executive was confronting his new role as a buyer of large appliances, like dishwashers, after several years as a book buyer. “We had beaten publishers into submission,” the executive said, noting giddily that when “Amazon asked for a nickel, publishers know to give a dime.”

“We aren’t there yet with the Whirlpools and the Samsungs,” he added. “We’ll get them under our thumb.”

Bezos, 57, has a complicated legacy of towering ambition, extraordinary success, unimaginable personal wealth and a scorched-earth business approach that is the envy of nearly every tech entrepreneur and a lightning rod for criticism. He is retreating from the top role just as Amazon faces the most serious regulatory threats to its business in its 27-year history.

Under Bezos, who will remain as executive chairman, Amazon’s singular focus on speedy delivery forever altered the retail landscape and consumer expectations along with it, and left in its wake a mountain of businesses that failed to keep pace. The company didn’t invent many of the things it’s known for — overnight delivery, mobile shopping, cloud computing and e-readers — but it did make them widely available and even expected.

Once-scrappy Amazon (Barron’s famously derided it as Amazon.bomb in 1999) has grown to be among the world’s largest companies by market value and made Bezos the world’s richest man, depending on the day. With his early bet on the web’s growth, Bezos helped define e-commerce as we know it and made ordering from Amazon the default for millions locked in, through the Prime subscription service. But his true masterstroke may be Amazon Web Services, the computing and cloud storage service that millions of companies turn to and which has generated the bulk of Amazon’s profits.

Those who’ve met Bezos will instantly recall his room-filling guffaw, which belies his relentless and, often, ruthless pursuit of success.

Read | Bezos's 2021 Space Odyssey a risk too far for insurers

Bezos founded Amazon in 1994, the internet’s infancy, with the simple mission of stocking every book it could for delivery by mail. That mission quickly expanded to encompass carrying nearly every item imaginable in massive suburban warehouses and a dizzying array of side ventures from cloud computing and home security to movie streaming, shipping logistics and pharmaceutical services. With the cutthroat efficiency its appliance buyer outlined, Amazon has helped drive into the ground a long list of household name retailers and dictated ever-rising output from its vendors and hourly warehouse workers. Unforgiving and unflinching, Bezos is a source of inspiration to countless CEOs who have described their own vision “to become the Amazon of” banking, video games, ride-hailing, travel, asset management, home building, fashion, even cannabis.

Bezos’ philosophy that he was “willing to be misunderstood for long periods of time” ultimately enriched him and investors but it had a darker side: an ultracompetitive workplace where employees are obsessively measured against one another and encouraged to trample their way to the top.

Amazon has become almost unavoidable on the web. Bezos’ Prime membership is a triumph of consumerism, making shopping on Amazon a daily habit for millions worldwide and an essential service during the pandemic, bringing groceries and other goods to doorsteps of those too skittish to venture out. Prime subscriptions swelled by 50 million last year, to more than 200 million, and alone accounted for around $25 billion in revenue.

Along the way, Amazon has exacted a heavy toll on its blue-collar workers, vendors and taxpayers — who’ve footed the bill via incentives for warehouses, corporate campuses and computing centers. Warehouse workers describe physically demanding and unforgiving jobs that include miles of walking daily and punishing turnover rates, amid increasing automation. And while undergoing a historic hiring spree — it’s now the country’s second-largest private employer — it quashed multiple union drives and pushed its hourly workers to the brink to achieve Bezos’ dream of near-instantaneous delivery.

Bezos’ disdain for taxes was a major reason he established the company in Washington state, which had a smaller population of buyers at the time who’d have to pay sales tax, giving it a price advantage over brick-and-mortar rivals. Armed with color-coded maps, company officials spent years evading state officials lest its customers be forced to pay sales tax.

Amazon’s yearlong pursuit of a second headquarters site sent local leaders prostrating themselves before Bezos for a shot at doling out taxpayer funds to underwrite an expansion the company could well afford on its own. But it got results — nearly $600 million in incentives from Virginia officials to build office towers in the Washington, D.C., suburbs.

If such heavy-handed business practices are to be criticized, they are also the source of admiration and fear among business leaders, rivals and investors. Even a rumor that Amazon is entering a new sector can send competitors’ stock prices plunging. And Bezos’ disparate passions have grown weedlike to include Hollywood, banking, advertising and law enforcement.

Also Read | Thousands sign petition to stop Jeff Bezos from returning to Earth after space trip

Despite his sharp elbows, or more likely because of them, Bezos made Amazon into a household name and fast, reliable delivery a baseline for consumers. Many flat-footed legacy retailers are still trying to catch up, and many more will fall by the wayside. When people talk about the ease of online buying, they have Bezos to thank.

For better or worse, he remade Seattle, solidifying it as a tech hub and transforming a former warehouse district into a soaring campus, though critics would point out that Amazon has contributed to soaring housing prices and rising income inequities.

In recent years, Bezos’ eye has wandered to side projects, particularly space. His Blue Origin spacecraft project will launch him next month, not coincidentally miles away from a host of terrestrial troubles facing him and Amazon.

The company, to be helmed by a deputy, Andy Jassy, faces bipartisan charges of anti-competitive practices, skeptical statehouses, a president critical of corporate power and growing regulatory scrutiny of its business, including its proposed $8.45 billion takeover of MGM. Unions seem determined to penetrate Amazon’s warehouses and shipping operations nationwide.

And Bezos himself, like Amazon, has drawn criticism for paying minimal or no federal income taxes. His mushrooming wealth — now roughly $200 billion — is a flashpoint for critics who say he and Amazon can afford to pay workers more and contribute more to local infrastructure. His ex-wife, MacKenzie Scott, has given money away at a torrid pace since their 2019 divorce while appearing to criticize those who hold “disproportionate wealth.”

Congress has Amazon in its sights, but really anyone who cares about the concentration of power and wealth should be concerned about the enormously powerful business Bezos has crafted. Like others, I’d like to think I would shop somewhere local, somewhere small, but Bezos has made online shopping addictively easy and obscured the very human cost of his rapacious juggernaut.

So while Bezos floats weightlessly in the cosmos, the question remains whether lawmakers can ultimately bring Amazon back down to earth.