John Rossman, an executive at Amazon in the early 2000s, has written “The Amazon Way,” about the 14 Amazon leadership principles that drive the retailer, including obsessing over the customer, hiring and developing the best, and practicing frugality.
The book, which was published through Amazon’s self-publishing platform, discusses how these rules can benefit any company — should it be brave enough to put them into effect. “None of the 14 principles mentions the need for a healthy work-life balance,” the author notes.
Q.What is your take on Amazon’s long-running effort to get Hachette, the fourth-biggest publisher, to lower its e-book margins? Why is winning this battle so very important for Amazon?
A.The deal that Amazon gets from Hachette will set a benchmark for other deals with publishers. When you’re in a scenario like this, you’re really careful with the first deal because it will implicate all the additional partners and vendors you’re going to negotiate with. Also, look at the incredible capital investment spree that Amazon is on. It’s under a lot of pressure to create more margin in areas that are already at maturity. They are looking for every dollar they can to feed into their other businesses. And then they have their long-term goal of taking out the middleman, allowing the content producers to put their work directly into the customer’s hands.
Q.Amazon has issued several statements, but in general is trying to remain quiet about this dispute.
A.There has been a long history of topics and investments and initiatives that Amazon has been comfortable either not explaining or taking some negative press on. One of Jeff’s great quotes is, “You have to be willing to be misunderstood for a long period of time.”
Q.What are the potential pitfalls in Amazon’s Hachette strategy?
A.Sometimes in these negotiations, you have to be careful in squeezing so much out of your vendor that they don’t have a viable business.
Q.In general, Amazon has a reputation of being very tough with competitors as well as suppliers.
A.Amazon has a willingness to aggressively compete on margin. It is able to have a race to the bottom that most other companies don’t want to have.