okay you just type www.amazon.com that takes you to our website the British do more of their shopping online than any other Nation last year tens of millions of British customers used Amazon to buy4 and2 billion pound worth of goods it's the instant gratification part of it that is so attractive to me and a little bit ominous Amazon is accused of changing the book business from this just have a read through a couple pages to see what you think to [Music] this Amazon's Ambitions now stretch Way Beyond books we about to leave for Afghanistan into the world of media introducing Amazon Fire TV its drive to cut prices puts the squeeze on competitors this is actually designed from the ground up to be a shark like it's designed to dissolve and Destroy other businesses but Amazon is also creating new jobs in Britain it gives us an opportunity to access a Marketplace that we would never otherwise be able to access start with the customer and work backwards Amazon's amazing story from startup to Global Titan is also the story of its founder Jeff Bezos he really is a tough boss he has driven that company and drives those people very very hard we ask what Amazon's everever growing business is doing to our econ and our lives and we examine how Jeff bezos's formula for Success shapes Amazon's culture and has made him such a happy [Laughter] [Music] billionaire there aren't many places where Amazon doesn't reach these days in fact the more remote the spot the more difference it's made to people's lives online retailing really opens up the world to us you can't buy a rowing machine in Jonah grz but Fred fermos arrived the day after he ordered it on Amazon although we live in quite a remote area we still have the same Choice as someone walking down the uh walking down Oxford Street in London across town at the hotel the darts team shirts also came from Amazon ordered by the manager Andrew M see look at that Bullseye before companies like Amazon or even internet it was a lot more difficult for us to um to get things here we do a a 20 M trip to Wicker tho or even worse than that 120 M trip toess Jah gr has one shop the locals still use it but it's never going to have all the things they can find when they're back home looking online what's a chap to do if he needs a fancy dress costume oh yes or even a special kind of mop for the family Ferry business the conveniences are resistable then at the click of a button you can buy it and basically it's here the next day you don't have to live in Jonna GRS to feel the lure of Amazon we asked teacher Melanie Collins to run an experiment with her London class year six I'm going to write a word on the board and I want you to think about the first thing that pops into your head what does this word mean 20 years ago there was just one answer I'm going to show you two pictures up on the board and you're going to put your counters underneath what you thought of [Music] first okay Mustafa can you please come up and count how many people thought of the river eight eight people okay thank you the mighty River never really stood a chance 14 people okay have a seat please most businesses would happily give their annual profits for that level of customer awareness Amazon's ability to get into our heads is the product of a unique company culture its engineers in London are working on its growing film and TV service let's go through that really quickly it's got a bit of information about each of the actors um some of the other movies that they already hey guys hey the British business is run by Christopher North an American who moved here 10 years ago everyone's kept in tune with the ideas of founder Jeff Bezos through a kind of Amazon think they're all expected to sign up to we have 14 leadership principles at Amazon and these are a set of principles that describe to us the characteristics you need to exhibit to be a successful Amazonian they had an extra why was that because there was I think we found that they are a kind of glue that knits us together as a company even now today that we're 97,000 employees at Amazon the principles are on the website for anyone to see and if you work at Amazon you'll never forget them it would be the equivalent of you know how the the the Ten Commandments influence Christianity they're not just words I mean you you you you have to be able to embody these things on a day in and day out basis otherwise you won't you just won't survive at Amazon stop don't have to learn the leadership principles by heart but there's one idea that's drummed into them every day although leaders pay attention to competitors they obsess over customers customer obsession is the single most important thing to amazon.com it's the thing we focused on from the very beginning Amazon Executives and and Jeff Bezos in particular will tell you until you you know cannot stand hearing it any longer that they start with the customer and work back backwards start with the customer and work backwards I don't think you should make any bones about it there's no no socially wonderful thing about working from the customer backwards it's smart business you only have to visit your local Royal Mail sorting office to see the impact of online retail email has meant we're sending fewer letters but that's more than made up for by all the extra parcel deliveries last year Amazon alone sold an average of more than £70 worth of goods to every man woman and child in Britain that's more than half of all online retail sales Amazon account for a large amount of our traffic the difference in volume is is gous yeah massive contribut uh to the amount of traffic we pick up now Amazon's business is good news for some but bad for others but we're a little low on stock at the moment I across Britain book shops have been closing at the rate of more than one a week see you soon I'll give you a call later Mrs Carrington okay byebye in banard s Linda Jones is ready to name the culprit I've actually had people coming in and taking photos of books on their phones and looking and saying you know they'll look at the back and they will be there for some time and then they will leave and I know exactly what they're doing they are going to Amazon to order that book because they can get it a lot cheaper Linda says Amazon's prices can make trading impossible for her for instance David WAMS new book demon dentist on Amazon £5 we have to retail it at $10.99 $1.99 we can't buy it for £5 so does it cost you to buy it costs us to buy $8.99 Amazon admits it sells some books at a loss I think you'd find across across many retail businesses it's very common for bestselling products to be sold at very low margin reasons even sometimes at a loss but ultimately we have to figure out how to make it all work Linda needs to take £10,000 a month just to break even that hasn't been happening and for the past year she's been using her own savings to keep the shop open I'll make you walk up I love books and I love bookshops and it's all well and good having that passion but I just can't afford to keep putting money into the business for Amazon's founder bookshops are just on the wrong side of History complaining is not a strategy Amazon is not happening to book selling the future is happening to book selling Amazon didn't invent the idea of shopping from home mail order catalogs had offered it for decades but this kind of thing started to feel distinctly low Tech when a new Vision appeared in the 1990s imagine a world where every word ever written every picture ever painted and every film ever shot could be viewed instantly in your home VI an information Super Highway ordinary domestic phone lines offered access to an exciting future it all comes down to computers communicating and in fact that's already happening on something called the [Music] internet [Music] the internet was already a Hot Topic in New York in the early 90s it had caught the attention of a young Jeff Bezos the wakeup call was seeing web usage grow at 2,300 a year back then Bezos was a bright 20s something computer science graduate Rising through the ranks of a Wall Street firm which was pioneering computer-based Trading there was plenty of talk about what the internet might mean for business in 1994 there was this idea that maybe the internet's going to be powerful enough that you can use it to create a kind of intermediary between customers uh Shoppers and manufacturers well that was a very vague idea uh but Jeff had this notion that maybe if you focused it in one product category on the internet you can offer everything the question was what's the first best product toell online I made a list of 20 different products and sort of force ranked them according to several different criteria and ultimately picked books Bezos was already married to McKenzie Tuttle who he'd met at work but their domestic routine was about to be [Music] disrupted he wanted to break away from the investment firm roll up his sleeves and build a business the bezos's packed up their apartment and left New York behind he was in such a hurry that he hired a removal truck he told them to Drive West and that he would get started and call them in a couple of days and tell them where exactly on the west coast they should go once young men were told to go west in search of gold or land but in the '90s they went West in search of Geeks Bill Gates's Microsoft dominated the new world of personal computers from his hometown of Seattle Washington so there was plenty of tech Talent around and Bezos sent the removal truck there also heading to Seattle from California was an experienced programmer shell caffin Amazon's first employee first we had to buy some computers and software we couldn't afford very big computers or very many computers or we did have to be frugal because there was a not a huge amount of investment the garage at Jeff and MacKenzie's rented house became the office Bezos insisted on getting desks made from doors to save money it's become part of Amazon mythology the original example of another of those leadership principles frugality we try not to spend money on things that don't matter to customers but employee number one always had his doubts about the desk doors if you ask the people building them you'll learn that they were actually more expensive than just buying a cheap desk looks Frugal but it isn't really Frugal I think frugali is in some ways a much misunderstood leadership principle frugality doesn't mean cheapness it doesn't mean penny pinching it means making efficient use of scarce resources and I think within the door desk idea the idea that you would improvise a desk out of the materials at hand you also have the idea of a kind of of a scrappiness of a kind of making do with what you have to hand after months of coding on the doors bezos's new business was launched www.amazon.com that takes you to our website Amazon's eighth employee Todd Nelson had been working as a waiter before he got the job that changed his life they had actually started shipping books in Jeff's Garage and they moved to this small Warehouse Todd started working here ordering and dispatching books he and his colleagues responded to a computer linked to Amazon's website they had a bell that whenever a customer would order a book there'd be a little ding ding you know and everyone would cheer CU we'd made another sale and within the first few days it was ding ding ding ding ding ding ding ding ding ding and they had to turn it off because you know it was annoying by listing any book that could be ordered from Distributors bezos's small business would claim the title Earth's biggest Bookstore over some large number of years I think internet book selling is going to become a very large business at the end of each day work in Amazon's offices stopped and everyone including Jeff and McKenzie went down to the basement to help get all the orders into the last post there's this feeling you just couldn't do enough I was working you know 12 16 hour days working most weekends I didn't take a vacation for the first 2 3 years but it's what I wanted to do I mean I was excited by my work is the most fulfilling work I've ever done that first tiny basement Warehouse in Seattle is a world away from what Amazon now calls its fulfillment centers with more than 100 million items for sale on the website keeping tabs on them across the network of warehouses is so complex that only the Central Computer really knows where things are Amazon has such faith in it that any item can be stowed on any shelf the product is stored completely randomly around the building uh and so the stower is allowed to pick any location that they want to in order to put that product away the random Arrangement is actually efficient because it reduces the chance of a worker picking the wrong item which might happen if similar items were stored side by side a customer will come onto the website order the product and the computer system will decide the best fulfillment center in which to to pick that product and uh we have Pickers and the computer system will send to their handheld scanner that order that says go pick down Abby Series 2 and it will also tell them where that product is the ordering process is almost completely automated but only a human being can walk down an aisle and tell the difference between an icing bag and a cuddly toy they will scan the product and then the computer system knows that that product has moved from the Shelf into the TCH because the computer knows how big things are it even tells the Packers what size box to use for each [Music] item then only at the final stage the item is matched up with the customer's name and address it goes onto our outbound dock uh and it will get put onto one of our many uh carriers vehicles for onward delivery Back In Jonah GRS there's a new van load of online purchases morning Sandy your costumes here perfect Fred fermer runs the ferry to ory out of season there's time to get things Ship Shape here's that thanks for okay a bot of Red mcregor Land please and Andrew Mo knows it's always easier to get the party started than with a Captain America [Music] costume Bezos was picky about who joined Amazon he originally interviewed everyone personally James Marcus passed the test he didn't overwhelm you in a sort of show busy uh Titan of business way but he had a lot of brain power and a lot of focus and you know after 10 or 15 minutes of talking to the guy a certain kind of magnetism came into play which was not traditional and was that much more persuasive I think because of it Amazon was soon too big for everyone to meet Bezos but new recruits were fired up in sessions about him and the company history even in the initial training you talk about things that Jeff would like and things that Jeff wouldn't like you learn his story driving out in the sedan being in the garage and like founding the company people love a winner and so just being on that team felt like something it was it was the kind of job you could tell your uh future wife's relatives about and they would be impressed that Christmas the office staff were expected to help pack books at the warehouse it gave them a rare insight into those much discussed customers you would pick the weirdest things there was a lot of porn there was a lot of scientific literature and I would gift wrap once a copy of mine comp of course I was hoping that whoever was sending it to someone for a Christmas gift was sending it as a kind of cautionary tale about man's in humanity to man or see how far we can fall but uh sadly the card that went inside the thing simply said Merry Christmas by the late '90s San Francisco was buzzing witht startups Reinventing business and office life this is Noka is an oldtime here been here since May companies like pets.com were famous for spending their investors money with no sign of profits Amazon 2o was losing hundreds of millions while moving to ever bigger offices but in the dot boom new rules applied Wall Street gave companies a pass they said okay we don't care if you make money yet you're going to someday but for now just grow take that money reinvest it in servers and marketing whatever just grow until you know you hit the sky and and we'll be there as loyal investors behind you Bezos and his staff think about Amazon's growth as what they call the flying wheel effect it works like this if a customer's pleased with their Amazon purchase they buy more and tell their friends so Amazon gets more traffic that means it can offer more products at lower prices which in turn attracts more customers the flywheel builds momentum and becomes Unstoppable it seemed at that point like there was nothing Amazon couldn't conquer in 1997 Amazon floated on a rising stock market only two years after it had opened for business it was he days for the internet and the stock price did nothing but go up up up Amazon's hardworking staff had all been given stock options when they joined one of the greatest absurdities at Amazon was that the reason everyone was killing themselves was because of the possibility that they would become hideously unspeakably rich at the same time no one ever talked about this you know it was very go to talk talk about it everyone had to like pretend as though it was some sort of communist state that everyone was just working because they just love working crazy crazy hard but the reality of course underlying everything is that there was this hope of some sort of enormous pay off and for a while it looked like that dream had come true did you read the times this morning yeah I saw the times this morning at one point on Friday amazon.com total stock market value surged past $30 billion making it worth more than a major Industrial company like Texico according to my calculations you yourself are worth somewhere in the vicinity of N9 or10 billion today I only say that because I've got a follow-up question okay what's with the Honda this is a perfectly good [Laughter] car the image of Jeff is one of sort of a brilliant Strate iic Financial mind and a delighted child you know um and that laugh I mean really really Jeff's laugh is is memorable you know when you talk to him uh if you're in a meeting with him it's it's the thing that you emerge talking about oh I loved the challenge of it when I was there especially at the beginning and and I frankly I loved Jeff too but working down the hallway from his laugh after a while it can you know get to grade on one okay thanks very much indeed thank you in 1997 the internet was still a novelty for British business Botham have set up what's called a website no I can't back then the new technology was much hyped but didn't always deliver the web promised universal access to information but then in the early days it involved unplugging the telephone to use your dialup modem and then have to wait many many minutes before every page loaded but it was still pretty exciting most big retailers didn't even have a website but there were already other online book sellers competing with Amazon Simon Murdoch was running a British site called book pages when he got a call from Seattle Jeff Bezos got in touch and arranged to come to London I think he talked to several businesses uh he met us in a hotel in central London Bezos said his staff in Seattle were already working on a UK version of Amazon but Murdoch's book business created another possibility the first discussions were coming here anyway would you like to be part of it or would you like us to compete with you quite aggressive yes a deal was done for Amazon to buy Murdoch's business and for Murdoch to become head of Amazon's UK operation amazon.co.uk is going to revolutionize book selling because we're making a very large number of books available to people very easily initially people were pretty nervous about online shopping I think the idea of putting your credit card details into a little box on screen was worrying hello amazon.com this is Dian how can I help you at first Amazon set up call centers to take down the credit card details of timid customers but most soon got used to the online routine Amazon helped encourage people to trust the actual process of just buying something online satisfied customers were persuaded to move from books to toys CDs videos and more as Amazon expanded its range we're trying to build a place where people can come to find and discover anything with a capital a that they might want to buy online but anything anything Amazon was becoming a giant retailer but Bezos decided it could be a Marketplace at the same time that would be a way to spin Amazon's flywheel even faster Bezos would get more value from both Amazon's website and its warehouses by offering Outsiders the chance to sell their products on the website site and use the warehouses to store and dispatch them it's called Amazon Marketplace the fundamental Innovation was inviting thirdparty sellers uh not only onto our site but actually compete with us directly on the very detail page that's been so successful that today more than 40% of all the units sold on Amazon worldwide are sold by third party Sellers and that's creating jobs even in this Nottinghamshire Village it's possible to make a living simply by spotting Bargains in supermarkets to sell on Amazon as Mark Reedman and Keith Whittle have discovered so we've got a couple of dolls we've not sold dolls before how much was that then $49 $4.99 what do you reckon you can sell it for they were selling for 17 17 who yes you really can comb your local shops to find cheap stock to sell on Amazon Marketplace if you know what you're looking for boots or sains spr or tesos or Aros um there are certain times of the year where they will do deals it sounds easy but like Amazon itself this is a tech business they track prices using software in August they bought a load of Star Wars Mr Potato Heads and have been watching their price ever since it's sort of dropped down at the beginning of the summer but as soon as we hit the November Christmas period it's starting to rise and will probably continue to [Music] rise it's a bit like trading on the stock market Mark and Keith store their goods until it's the right moment to sell sometimes it means we have to sit on stock for 6 months so we're investing our Capital but with a longer term aim that we'll make a profit on that some sometimes it's a bit of a lottery but it normally pays off if you've got the space to keep hundreds of games gadgets and toys Keith and Mark say you can earn your keep like this if you're looking at between 5 to7 a unit's profits then you've only got to be turning over say 15 20 units in a day and over a week over a month over a year that adds up to be quite a decent salary that's about £100 profit a day or about £37,000 a year as long as you're open for business 7 days a week we've been labeled as a nation of shopkeepers um but actually Amazon's sort of taken that for us as small retailers into the 21st century where we can actually all sell our goods and our Wares but you know without the need of that physical premises the internet has been the most hyped industry of the century but now as shares collapse it could wreck the future for us all the stock market couldn't rise Forever at the start of the new century nervous investors started to panic well all good parties come to an end and so bang stocks would go from 50 to 5 in a month and that was was the answer Amazon staff who'd watched with amazement as the stock price Rose now saw it lose 98% of its value I lost millions of dollars of paper worth and um that's the way it goes you know there's just no way around that only the very earliest joiners had enough share options to enjoy the rewards that everyone had been hoping for was it that you actually didn't need to work again yes yeah I I retired when I was 37 for less fortunate staff there was a harsh new reality amazon.com this is Lance instead of hiring for the first time Bezos was forced to lay people off and he had to persuade those that remained that whatever Wall Street said Amazon would continue to grow and would one day make money top Executives from that time say frankly that there was nobody inside Amazon who belied that this would one day be a 50 billion let alone 100 billion Revenue company but they also say that Jeff never blinked once that that he has ice water running through his veins and that he saw that internet shopping is convenient and prices can be lower when you centralize inventory and he just refused to Blink alongside the customer Centric Mantra there's a toughness in Amazon's corporate culture leaders do not compromise for the of social cohesion and leaders do not believe that their or their team's body odor smells of perfume H curious he really is a tough boss he has driven that company and drives those people very very hard and you either survive there because you buy into that culture and it's the culture that he has created or you leave because it's just nothing you have any desire to be around Dave Cotter left Amazon after 4 years to set up his own business it's a social network for families beginning with his own Amazon can be a very difficult place to work but I actually look back super super fondly and kind of Revere the intellectual challenge that it provided it still can be really hard on a day in and day out basis to have kind of everything that you do or everything that you're surrounded by kind of be open open for attack Nadia shabura also left Amazon to launch a startup bringing online technology to shops it could hardly be more intense than her old job Amazon was really the way of my life I lived at Amazon and I lived within Amazon uh I was married at Amazon and uh every hour of my waking day I was thinking about Amazon here's one kind of Crisis that all Amazon Executives dread Bezos gets a customer complaint he forwards it to the person responsible with a single cryptic addition you get an email message and there is just a question mark in it I got one for me at the time it was just kind of scary and terrifying only because I hadn't been at Amazon very long so immediate things sweaty Palms um Panic anxiety get just drop everything all hands on deck we got to address this what Jeff wants you to do is to go down and not only fix it but fix it forever have a mechanism in place that that screw up never ever happens again many companies might just say like okay this one customer had this one issue Jeff takes a very different perspective which is maybe there's a way to improve the system however long it takes you work away until that particular failure is impossible and then then you report back and you get usually a smiley face after that saying that yes thank you Amazon survived the dot crash just thanks to having borrowed enough Millions to stay afloat but Bezos always had Ambitions Way Beyond mere survival the Big Ideas in business are often very obvious but it's very hard to maintain a firm grasp of the obvious at all times in the mid 2000s Bezos sets the company on A New Path using its existing assets to move Beyond retail just as it had offered warehouse space to outside sellers Amazon created a huge new business called Amazon web services which rents out its computing power to Outsiders the company also Drew on its techy expertise to create an e-reader Amazon's first consumer product selling it direct to its customers made the flywheel spin even faster the e-reader was created in a secret Amazon lab in Silicon Valley Amazon's New Direction was a response to the success of Apple's iTunes played through its iPod Jeff had seen what happened with music we were buying our iPods they were very pretty but then what we were really buying was the music that went on top of them the software and Jeff said well I'm not going to let that happen to books books is our Core Business it's Central to us I'm going to get ahead of that and that's why he introduced the Kindle so we would begin to buy our books and now our movies and our other content on the Kindle the first version of the Kindle was launched in 2007 looking a bit like the poor relation of an Apple product but 2 years later there was a new model that Bezos went out to sell very few technologies have a lifetime of 500 years the physical book has had a great run so that's it death of the physical book I think there will always be books it's not death but if you look over you know some period of time it makes sense for it to continue to evolve so if you believe as I do that long form reading is important then a device like Kindle is important because it makes that easier the Kindle doesn't only let Amazon sell books electronically it's created a publishing business too because anyone can use it to upload their own writing it's really democratizing the AB ility to to start and grow a business uh as an author as turning authors in a sense into entrepreneurs this couple had done well from Amazon's new self-publishing business Nick Spalding worked as a press officer for the police but he'd always wanted to be a writer 3 years ago he gave himself a final chance I set myself the challenge to see if I could write an entire book in one city so I sat down on a Saturday morning and just started writing I had no idea how long I'd go for but I managed 30 hours and had 50,000 words plus written at the end of [Music] it after a bit of editing Nick's book was ready for the world he uploaded it to Amazon for sale to Kindle owners if you've got all your ducks in a row before you sit down to do it it takes 10 minutes you need to give your book a price if you keep it cheap you'll sell more and earn 35% of the sales price at some higher prices you'll get a generous 70% in royalties click save and publish and that is the end of the process initially I was a little bit skeptical not that I doubted his writing ability but as it was a new idea I just wasn't sure how it was going to work you sell one you sell two and it's a thrill there somebody you've never met somebody you'll never meet has bought your book and is potentially read reading it right now he would spend a lot of time in the evening checking his sales figures on the laptop and I would be there sort of rolling my eyes um as he got oh we sold another copy I've sold another copy Gemma had to change her tune when Nick followed up his first effort with a bardy comic novel anakah was a goddess a blond perfect golden skinned creature of myth or Sweden as they apparently call it these days it started to sell and it started to sell more and more Shan thought I'd be the perfect candidate given that he knew I was horrifically single and for it to go up to thousand over the course of an afternoon was a head spinning to be quite honest with you that year Nick sold 430,000 books on Amazon and now he sold the books to a traditional publisher cashing in a second time um yeah it was a sixf fig Advance which which is a lot for for a first time author Nick resigned from the police to write fulltime he and Gemma have already made use of his new earnings I love Amazon they bought me a [Music] house if you look at the bestseller list typically you'll find nowadays that about one in five of our Kindle best-selling books are self-published books via the Kindle Direct publishing platform that's a worry for these Publishers gathering in London to discuss the future of their business Amazon are undoubtedly the most important player in the book world today uh whether ebooks or print books they really are the central platform around which the whole publishing industry is operating these days there's no shortage of speakers to offer views on the future of the business but none from Amazon itself content Amazon is notoriously secretive we'd like to have Amazon speakers here but the way they operate uh they tend to not want to do things as part of an industry conversation or as part of a dialogue which I think is a shame despite the threat from self-publishing whether they like it or not for many of these Publishers Amazon remains their top sales Channel they're torn between gratitude and fear the general feeling is that it is terrifying and wonderful an equal measure there's no escaping the fact that Amazon is a dominant force and um Monopoly is never good for business and certainly never good for the consumer they're not in business to support Publishers they're in business to make Amazon successful as possible um and some of the things that they do in that are contrary to the things that we would like so you fight back and that's what I'm doing with Hara Collins and I think we're doing as a business very well and um you know bring it on there's plenty of fighting talk to keep the spirits up we are an industry that has survived hundreds of years we are going to be here in hundreds of years but Amazon and its founder Jeff Bezos are never far from people's minds Publishers think about Jeff Bezos sort of like they might think about God uh as a kind of very distant inaccessible figure who is all powerful and all knowing God loves us yes but uh god is vengeful um the Amazon Universe keeps on expanding the new Kindles still download books all right let's rehearse huh they also play Amazon's new TV and film Productions action there's a new set toop box to watch them on TV we packed in loads of entertainment or play Amazon games and now in some American cities there are Amazon grocery deliveries from Vans advertising Amazon Productions with Amazon Prime you get something truly amazing and there's Amazon Prime a subscription service for free delivery which cross promotes other Amazon businesses you'll get access to the Kindle owners lending library where Amazon Prime members can borrow best-selling books for free the kill family in Seattle live the complete Amazon lifestyle all right all right thank you my parents always use for groceries and stuff and sometimes if we're out of snacks for school we ask Mom did you order Amazon and shows yep it's on its way they're fed entertained and provided with literature toys and almost anything they might want to buy all by one company mom who's this for everybody with our hectic schedules and the kids with different activities we always need things right away uh you know kind of on demand shopping it's just been really good service for us the corellis are living proof of the flywheel effect every Amazon service they use increases their use of the others I I have to say the Amazon Fresh because I liked it so much it made me want to use amazon.com even more and the family's media consumption centers on their membership of Amazon Prime so you can watch movies if you're a Prime member stream it to your devices and also if you have a Kindle you get you can borrow books if you have a Prime Membership you don't have to pay do you have Kindles we do we have four well there's different types of Kindles like a basic Kindle Kindle Fire which is basically like a mini iPad for the Amazon generation visiting shops is just a waste of time it's a pain in the neck you just go into a grocery store and you have to look for everything Amazon you just search it up with the Press of a button it's easier Jeff Bezos isn't finished yet let me show you something oh man he recently revealed something on American TV that caught the imagination of the world these are uh effectively drones but there's no reason that they can't be used as delivery vehicles take a look up here so I can show you how it works all right we're talking about delivery here we're talking about delivery so there's an item going into the vehicle I know this looks like science fiction it's not wow [Music] Amazon isn't claiming its drones will be operating anytime soon but its eye-catching video just happened to be released ahead of Amazon's Peak pre Christmas sales period of course this is a completely impractical way of actually delivering products but it meant that everyone was talking about Amazon and so people would go to the Amazon website and then buy stuff it's only 20 years since Amazon sold its first book today the company's valued at $170 billion with an Empire that caters for more and more of its customers needs but some of its early staff think it's getting too powerful they're going to own the book They're going to own the information that goes in the book They're going to own the shipping I mean it's just they can't own it all you know so I have mixed feelings sometimes about Amazon sometimes I feel like surely there are consumer items that I should simply go downstairs and buy from the store around the corner and not do the easy thing which is find the laundry bags on Amazon and hit one click you know there's an element of of of guilt in there do you think you're turning us into lazy and perhaps slightly guilty consumers no I don't think so at all I think that um anything we can do to make consumers lives easier including in their the the the shopping they need to do is giving time and money back to Consumers that they can spend doing something else you you can't actually have the company that Amazon is and have it care about what it's doing with the ecosystem because it's actually designed from the ground up to be a shark like it's designed to dissolve and Destroy other businesses by like undercutting [Music] them whether because of how it works or because of its sheer scale Amazon's increasingly on the radar of politicians and regulators especially in France for decades French law has stopped books being discounted by more than 5% and that applies to Amazon [Music] too the novelist orelli filipetti has a second life has France's minister of culture with a particular passion for protecting the nation's [Music] bookshops government and opposition are united in believing the existing restriction on book discounting isn't enough to restrain Amazon now a new law will also restrict Amazon's free postage and package offers but nobody in this Paris Bookshop seemed to mind the minister accuses Amazon of trying to eliminate competition in the book business the point no I I certainly I certainly wouldn't accept that charge I don't think we're trying to eliminate the competition I think that UK customers if I focus on the UK which I know best um have access to a lot of different choices and and prices one dimension on which retailers compete but book books are only one industry which has complaints about Amazon Mark Constantine's Lush shops sell soap and other products the company invents and manufactures from its headquarters in pool [Music] Dorset here's um typical honey I wash the kids um you can cut this have whatever size you like made with English honey beautiful smell there are no Lush products on amazon.co.uk because Lush decided it wanted to control all aspects of its retailing what upset Constantine was what happened when customers tried to find them when you type in Lush inside Amazon you're then taken to products from a competitor so similar products to our own but they are not us Constantine was so incensed he took am to court they have traded off our name they've then damaged our reputation and then we lose business because the customer thinks that we are not providing the quality that they expect from us Lush won its case Amazon declined to comment but says it intends to appeal but Constantine has a bigger objection to Amazon while Lush employs people in its British factories and High Street shops and pays corporate tax to the British government Amazon's UK operations pay a lower rate of corporate tax through an Amazon subsidiary based in Luxembourg it's saying to society here's a Marketplace but we're not going to make a contribution to you financially um unlike other marketplaces like the High Street we're going to reconfigure that and this is our business model so I think that that's a fundamental attack on society the choice of having a single European headquarters has nothing to do with with tax or anything else it's simply the only way we could operative business of this complexity and scale for the choice to be in Luxembourg tax was one consideration the French are also concerned about Amazon's tax Arrangements entrepr what we've said very consistently is that we pay all of the taxes we are obligated to pay everywhere in the world and we will always do so however people may feel in Europe back in Seattle Amazon's tax Affairs hardly raise an eyebrow in the United States Tax avoidance is generally applauded you know this is a country that happened to throw a whole bunch of tea into the Boston Harbor when the British wanted to tax them on something that they thought was unfair and so it is not surprising at all to I think most people who follow Amazon that it is doing what it can to pay as little in taxes as possible both in the US and abroad for successful business Amazon has one unusual feature it doesn't actually make money well we are famously unprofitable company since its founding Amazon's sales have grown spectacular ularly but its profits have been minimal Bezos says that's deliberate because he's still investing in new warehouses and new businesses it's very hard to beat a nonprofit business other companies have to make a profit or their investors will be angry um Jeff has successfully made people want to support a company that doesn't need to make a profit and that's an incredible business Advantage however well Amazon's persuaded the markets it doesn't need to make profits or governments that it doesn't owe more taxes the company insists it's still a good corporate citizen we've collected and remitted more than a billion pounds of VAT on behalf of the ex cheer we purchased many billions of pounds of products from UK suppliers we spent over a billion pounds in The Last 5 Years just on the delivery companies who do the last mile delivery um and we've created you know many thousands of jobs there are new jobs in this Warehouse which only exist because of [Applause] Amazon Awesome books were started in a spare room in Reading just 7 years ago by mubin Ahmed and his brother for us it was really just getting the supply and almost Amazon could take care of their marketing and everything that would attract the sales that we needed they get B books from libraries Charities Publishers anyone who wants to get rid of large numbers the company's software tells its staff whether each book is worth listing on Amazon keeping to sell elsewhere or can only be thrown away awesome processes 18 million books a year and sells around 5 million to individual buyers with Amazon the dominant Outlet ultimately uh we wouldn't exist without Amazon and so our profits are their profits in a way and it's only fair that we have that symbotic relationship where as we grow they grow 200 new jobs have been created here mubin has adopted Amazon's customer Centric ideas at the end of the day the customer has dictated that online is more convenient uh and the price points are better for them and so the market has to [Music] adjust [Applause] that adjustment has created losers as well as winners your friendly local shopkeeper may feel the efficiency of online retail comes with a high price in terms of our relationships we will become more insul as a society we will sit at home in our rooms and we will type in what we need we won't talk to anybody you know we won't communicate our communities will become smaller and we won't see people and I don't want that take care thank you bye-bye now bye Jack Linda decided she had to stop using her own money to support the business and the Bookshop has now closed is it in Amazon's interest that bookshops go out of business no I don't no I don't think so I think that Amazon does best in an environment where there's a lot of thriving competition we're a company that that appreciates a competition and and uh it challenges us to do even better can anything stop Amazon well competition between online and the High Street may be taking a new turn that could leave Amazon playing catchup it's to do with Smartphones at the moment people go into shops and they can check prices on their app check it on Amazon find it cheaper and buy it so try something on in the in the shop but then buy it through a competitor and I think that retailers are waking up to this fact and trying toate create better experiences in the store in Silicon Valley eBay believes we're about to witness a blurring of on and offline shopping so follow me now we go to the next one it wants to partner with traditional retailers and has a whole demo area to show what's possible so Lisa clicks on these shoes loves them looks at some of the photos says you know what I'm going to get these they're right down the street so what's interesting this idea is click and collect with a new new Personal Touch fantastic and she notices she can check in automatically when she gets to the store fantastic so she places the order and she knows when she then walks into the store the store assistant is going to say hey Lisa welcome to the store we've got your pair of shoes ready we can do things with technology in the physical store to make people understand find and discover and then purchase product in a far better way some of these ideas are already out there such as giant touch screens to encourage customers to buy online even when they're out shopping think Minority Report right the movie this is this is the possibility right of sort of you take these vertical surfaces and turn them into engagement right where where the consumers can actually interact and according to eBay Amazon's business model may not be as efficient as it looks today having your own fulfillment centers um and many of them is one way to go it's expensive it makes you become you know uh a physical logistics company eBay's Vision reminds us that old-fashioned shops weren't actually such a bad idea after all guess what they have product sitting there so why then build another Warehouse that's all around those yet another place for trucks to show up and drop product and that kind of thing and instead take the inventory that's already moved close to that consumer and get it to him right from that [Music] point anyone trying to challenge Amazon will find its businesses protected by its massive investment in technology especially as it expands into media and tech services today it's taking on much fiercer competition than shops in reality Amazon is competing with Netflix and Facebook and Apple and Google and and those are the companies that have the ability to undermine what Amazon has built all over those years I think the next 10 years are going to be fun to watch as all these little battles take place to see who's going to win whatever happens Jeff and McKenzie have done okay he's now worth $27 billion according to Forbes Magazine she's become a novelist and he's bought a prestigious newspaper The Washington Post test 4 3 2 1 ignition oh and he started his own rocket company blue origin to bring space travel to the masses maybe one day it'll deliver Amazon packages to the moon at this moment in time boy it looks like Amazon is hitting on every cylinder but it is a moment in time and I think it is entirely possible as we go two years five years down the road things will change Amazon will be disrupted one day then you worry about that I don't worry about it because I know it's inevitable companies come and go and the companies that are the shiniest and most important of any era you wait a few decades and they're gone and your job is to make sure that you delay that date i' I would love for it to be after I'm [Music] [Laughter] dead the open University delves further into how businesses like Amazon continue to Boom to discover more go to bbc.co.uk business Boomers and follow the links to the open University where you can also take part in an online survey next here on BBC 2 Scotland to Mark our 50th birthday Dar oin hosts a special quiz all about [Music] two