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Profit An Elusive Goal As Bezos Runs Up Score

Monday December 16th, 2013 - 2:53PM

I don’t know what kind of football fan Jeff Bezos is, but the Amazon chief certainly exhibited his penchant for throwing the deep ball during his recent interview on “60 Minutes.”

Amazon was already claiming a “Black Weekend” victory that saw robust double-digit sales gains when Bezos tried to run up the score on the eve of Cyber Monday by declaring the company is only a few years away from 30-minute order fulfillment by unmanned drones.

Mad Genius

If the thought of thousands of drones buzzing around to drop off the latest James Patterson novel sounds crazy, consider if you will the mad genius of Bezos to get everyone talking about it.

Consider also that while the feasibility of drone delivery is not nearly the science fiction it might seem, Bezos is tossing a much bigger message: That Amazon will stop at nothing in its staunch pursuit of unparalleled distribution efficiency.

The chief executive of a leading housewares company, while discussing Bezos’ drone theory, said doing business in a market where Amazon-required logistical support is becoming a heavy cost of participation (on top of other retailer mandates) requires more “blocking and tackling” than ever.

Back-Room Basics

This industry has become so consumed by operational constraints that it’s impossible to advance without a sharper focus on improving back room and organizational basics. To use another football metaphor, it’s akin to a “ground and pound” approach intended to produce enough modest gains to put a team in position for a score.

But it seems that companies in this industry can become so preoccupied with the requisite blocking and tackling that there is not much room left to draw up a more daring play with a potentially bigger payoff.

No doubt, there’s more pressure to perfect the meticulous fundamentals needed for success amid the squeeze of a marketplace with narrower margins for error. Companies that can muster up some measured chances set up by sound fundamentals have a better chance to widen the margin of victory.

Droning On 

Not to be lost in all this is that while Amazon blocks and tackles in pursuit of optimum e-commerce efficiency and its sales soar, profit remains elusive. 

Jeff Bezos might sound like he’s droning on about the future of unmanned 30-minute delivery. But you have to give him credit for getting everyone buzzing.

Could all his talk about drones just be a decoy? While everyone is trying to figure out how much of Amazon’s assortment falls within the 5-pound drone delivery limit (Forbes, incidentally, reported that eight of its top-selling home and kitchen items would qualify for unmanned flights), does it keep the attention off Amazon’s mounting challenge to come up with a big play to keep it in the black?

In business, as in football, you have to throw the ball downfield every now and then to win. In business, though, running up the score makes the most sense when the players get to make more money.

—peter Giannetti