When Jeff Bezos delivers his annual letter to shareholders, it’s one the majority of the business community ends up reading. Bezos’s 2012 missive came out this week and was notable for the approach the chief executive took to Amazon’s (NASDAQ:AMZN) profits — or lack thereof. Bezos was adamant in his defense of Amazon as a customer-first operation. But was it his way of saying he hated Amazon’s profits?
Few people doubt the work of Bezos, who commands a level of respect unmatched in the industry. Though he alluded to stock prices briefly — saying a 10 percent increase was not the biggest reason for celebration — Bezos continually hit his point that the customers command his total attention. (Considering Amazon stock has gained impressively over the past year, his mentions of “10 percent” increases were almost comically humble.)
Bezos shied away from the fact that Amazon lost money in 2012 and, considering the $39 million wasn’t devastating on any level, he could justify that position. Yet businesses as imposing as Amazon are expected to turn profits. Bezos notes causes worthy of acclaim in the form of customer comments and the money Amazon has spent on upgrading its service and overall scope. He also seems to hint that the profits are about to explode…
How will the system work? Bezos writes that preemptive strikes like lowering prices before it’s necessary encourages customers so much they’ll come back without being begged to do so. Bezos believes, “Proactively delighting customers earns trust, which earns more business from those customers.”
In what could be viewed as a thinly veiled shot at Apple (NASDAQ:AAPL), Bezos expressed satisfaction at seeing nearly all generations of Kindle in use on a recent trip to a Florida beach. “We don’t need our customers to be on the upgrade treadmill,” he writes, perhaps in response to rumblings about the money to be made in constant hardware upgrades.
Yet Bezos stayed on point, saying that content was more important than hardware, and that keeping customers happy would lead to buy everything under the Amazon umbrella. Does he hate the earnings reports? It’s possible, but Bezos made a good case for the other argument — that Amazon is simply playing the long game, where gigantic profits await.
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