The Strategic Case for Amazon Launching as an Online Bookstore

Amazon sold only books when it launched, before it moved into any other category. Why do you think it chose to start with books? ```hint Compare against the alternatives Picture the other products an internet store could have begun with in the mid-1990s. Ask what made books easier to sell online than in a shop, and easier to sell online than those other products. ``` ### Clarifying Questions - Should I reason from the conditions of the mid-1990s, when the choice was made, rather than from what Amazon is today? - Do you want the reasons from the customer's side, from the supply and operations side, or both? - Should I also explain how books set up the expansion into other categories, or only why they were the right first product? ### What a Strong Answer Covers - Customer value: why an online bookstore beat a physical one on selection and search, and why buyers were willing to buy a book they could not see - Supply and operations: getting inventory without stocking every title, and how shipping, storage and returns compared with other products - Market structure and economics: market size, fragmentation of suppliers and incumbents, price point and margins - A comparison with plausible alternative first categories, and the weaknesses of books as a business - How the first category built the customer data, trust and fulfillment capabilities that later categories reused ### Follow-up Questions - Which product would have been the worst choice for a first online store in that era, and why? - If you were launching a new marketplace today, which criteria from this case would you use to choose the first category? - Books had thin margins and were bought infrequently. How did Amazon have to compensate for those weaknesses as it grew?