Amazon Prime now has 100 million subscribers and shifts “tens of millions” of Alexa-based devices

Alan Martin April 19, 2018

For some, the art of letter writing seems to be dying out. Nobody has told Amazon founder and CEO Jeff Bezos, who has continued to write a letter to shareholders every year since the company was founded in 1997.

Amazon Prime now has 100 million subscribers and shifts “tens of millions” of Alexa-based devices

As time’s gone on, he’s found a lot more to say each year, so while the first letter was relatively slight at 1,617 words, this year’s opus comes in at a hefty 4,360 words. The most interesting element in there? Amazon Prime now has over 100 million subscribers. Considering that a Prime membership costs £79 per year, that’s a lot of income – even taking half-price student subscriptions into account.

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“In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the US now receive unlimited free two-day shipping on over 100 million different items,” Bezos writes.

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Part of this can be attributed to the service’s expansion – as Bezos points out, 2017 saw it being rolled out to Mexico, Singapore, the Netherlands and Luxembourg, but clearly other factors are at play. Off the top of my head, Prime Day offers deals only available to Prime customers, and of course Prime Video is a big driver of subscriptions too – in fact, part of Amazon’s metric for measuring the success of shows is how many Prime accounts they create. As Bezos said back in 2016: “When we win a Golden Globe, it helps us sell more shoes.”

Elsewhere, Bezos mentions the company sold “tens of millions” of Alexa-based devices. That’s likely to be largely Echo-led, though he does mention the Fire TV Stick with Alexa in the same sentence, so I’ll leave the slightly clumsy categorisation there. Perhaps more importantly, 2017 was the first year in which more than half the products sold on Amazon were from third-party retailers, which should give eBay cause for alarm.

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Bezos also gives a special shout-out to India, where Amazon hit some interesting benchmarks: it became the most visited site on desktop and mobile; became the most downloaded shopping app and acquired more Prime members in its first year than any other territory in the company’s history. This might go some way to explaining the company’s India-only internet browser I wrote about yesterday.

A lesson in “high standards”

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If I’ve managed to cover the main points of the letter in 400 words, you may wonder how Bezos manages to compile an opus over ten times the length – the answer is a long introduction about company values. “When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring,” he writes. “But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).

“Understanding this point is important because it keeps you humble,” Bezos writes – although how humble anyone with a $42 million clock in their garden can be is perhaps worth a moment’s thought. “You can consider yourself a person of high standards in general and still have debilitating blind spots. There can be whole arenas of endeavour where you may not even know that your standards are low or non-existent, and certainly not world class. It’s critical to be open to that likelihood.”

You can see how this letter would quickly hit word counts that would make most editors roll their eyes, but it certainly raises a plenty of talking points. In fact, perhaps the most interesting lesson for anyone looking to emulate Amazon’s success is a story Bezos goes into about a friend who wanted to perfect the handstand:

“A close friend recently decided to learn to do a perfect free-standing handstand. No leaning against a wall. Not for just a few seconds. Instagram good. She decided to start her journey by taking a handstand workshop at her yoga studio. She then practised for a while but wasn’t getting the results she wanted. So, she hired a handstand coach. Yes, I know what you’re thinking, but evidently this is an actual thing that exists. In the very first lesson, the coach gave her some wonderful advice. ‘Most people,’ he said, ‘think that if they work hard, they should be able to master a handstand in about two weeks. The reality is that it takes about six months of daily practice. If you think you should be able to do it in two weeks, you’re just going to end up quitting.’ Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards. To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be – something this coach understood well.”

In other words, some things take time to do right. And on the 20th anniversary of Jeff Bezos’ first Amazon letter from 1997, you can’t really argue with that point: there aren’t many dot-com tycoons from that era still standing.

You can read Jeff Bezos’ full letter here.

Lead image: James Mattis, used under Creative Commons