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The Amazon Effect: Everything Comes to R&D

Each year, Jeff Bezos, the mastermind and business innovator behind Amazon shares a letter with his shareholders. These letters, dating back to 1997, serve as a goldmine of independent and innovative thinking for today’s business leaders. Our series, The Amazon Effect, focuses around these letters – and today we’re discussing the necessity for research & development.

Let’s get one thing out of the way: we realize that not every business can operate the way Amazon does. Amazon is in a very unique position as occupying a space it created for itself, and has reached a point of success where they can easily enter new industries.


Your typical small business on Main Street does not have this power. But, you can still take a look at some of the guiding principles that Bezos operates Amazon under and try to adapt them to your business and your industry.


So when we tell that that in in his 2010 letter, Bezos wrote about pushing each department and division of Amazon to focus on Research and Development, we are saying that is useful for your business, too.


For Amazon, they probably can’t exist without this being the case because they’re a tech-based company. A small flower shop should have a digital element (social media and/or a website), but probably doesn’t have an Amazon-sized need for tech advancement. Nevertheless, according to Bezos, it’s important to have the perspective of being tech-forward.


Why? Because it’s cheap.


Taking aside his trailblazing ideas and visions for the Amazon, at its core, Amazon was able to be so successful because of the way they were able to keep costs down by being web based.


From the beginning, they had a leg up on traditional booksellers and later on department stores and wholesalers because they did not have to worry about brick and mortar costs. This pushed them to continue to invest it streamlining their digital processes.


Everything from the ease at which a customer can search for a product or leave a review, to automating other backend processes so that they can happen quicker, are things that Amazon had to focus on.


For your small business, the idea of spending on a new point of sale system, or developing an app might seem like an unnecessary expenditure. Big companies can have apps because they’re big and have the extra money to spend on them, whether they bring in revenue or not.


This might be true, but think from the Amazon perspective: time wasted is money wasted. A slow or cumbersome process for a potential customer is a turn-off.


If you can invest in something that can streamline a customer-facing process, it will result in quicker sales and quicker sales result in more sales.


Don’t be afraid of technology and don’t be afraid to invest in a process that might not yield you an immediate kickback. Remember, the Amazon perspective: keep things moving well for the customer, and the returns will be there.

In our series, “The Amazon Effect” we’ll delve further into Bezos’ yearly letters to shareholders and how they can help you and your small business. Keep checking back for more.

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