How to Negotiate Like an A-hole: Amazon Edition

91jQbQf8lTL._SL1500_In the book The Everything Store, Brad Stone takes an inside look at the rise of Jeff Bezos and Amazon. Bezos is notorious for his belief in the long term, which leads to the company sacrificing short-term profits to help fuel future growth. The company also has a maniacal focus on customer satisfaction, often at the expense of relationships with vendors, clients, and (sometimes) employees.

Stone reveals several anecdotes where these two factors meet to led to some ultra-shrewd business moves by Bezos and his team. Some examples:

The Kindle

When wrangling publishers to offer their books for the Kindle, Amazon purposefully never mentioned price. The publishers found out with the rest of the world at the Kindle launch event. From the book:

Among the gathered publishing execs at the Kindle press conference, there was confusion. Was the $9.99 price a promotional discount for the launch?

Finally the grim reality set in and publishing executives kicked themselves for their own gullibility

[One publishing executive said,] “If I could rewrite history I would have said, ‘Thanks so much, I love the idea of the Kindle, but let’s have an agreement that says you will not sell below the cost.’ I feel like I was asleep at the tiller.”

The new price made digital cheaper than paperback, which made customers buy more books, which made the publishers more dependent on Amazon. The company purposefully capitalized on the publishers lack of understanding about the new medium to provide the best value and make the book industry further reliant on Amazon. 

UPS

In 2002, Amazon’s contract with UPS was up for renewal and the shipping company was ready to play hardball. Amazon was in a weak negotiating position. It wasn’t using FedEx at all, and the Postal Service was barred from negotiating rates. Six months before negotiating, Amazon moved to improve its positioning:

Over the course of six months [Amazon employee Bruce] Jones traveled to FedEx’s headquarters in Memphis, integrating their systems and quietly ratcheting up the volume of packages. Amazon also increased its shipment injections with the U.S. Postal Service: company employees drove Amazon’s trucks to the post office and inserted packages directly into the flow of federal mail.

Then, when UPS refused to lower their rates, Amazon “flipped the switch” and stopped using UPS cold turkey:

“In twelve hours they went from millions of pieces a day to a couple a day,” says Jones.

UPS execs caved and gave Amazon discounted rates.

Toys “R” Us

In its early days Amazon would partner with various retailers to keep its site stocked with items from markets it didn’t understand or couldn’t fit in its warehouses. One of the company’s earliest partners was Toys “R” Us, and Bezos ratcheted up the theatrics:

The negotiations were, as was often the case when Jeff Bezos was involved, long and, according to Jon Foster, “excruciating.” When both teams met for the first time, Bezos made a big show of keeping once chair open at the conference-room table, “for the customer,” he explained.

They two companies ended up striking a deal after being at an impasse for months.

While Bezos and company weren’t so kind to their negotiating partners, no one can argue with the results. You can buy the book here.

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Open Thread: Do You Involve Customers In Your Creative Process?

Collaborative-Learning designed by Duke Innovation Co-Lab for the Noun Project

Collaborative-Learning designed by Duke Innovation Co-Lab for the Noun Project

That’s right. Clients don’t have to just be on the receiving end of our work. Patrick Hanlon at Inc. explores the ways that clients can become collaborators. He writes:

Today, consumers aren’t just your buyers, they can also be your collaborators. They can help you design, build, promote, and sometimes even distribute your products or services.

He pulls an example from the business world about working with customers at the onset:

First, collaborating with customers during the product innovation and design phase helps marketers understand real need states.  P&G, GE, Yum! brands, and others bring consumers into early stages of design and development.

Hanlon stopped short of really answering the question, so let’s discuss it ourselves. How can we collaborate with our clients to enhance our work and processes? How can we use them to gather invaluable feedback to make sure what we’re doing – whether it is building a product, developing a new service or executing new promotional ideas – is actually effective? How can we then turn clients into fierce ambassadors invested in our work, of which they feel ownership in?

Let us know in the comments what your experience is with customers as collaborators.

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When Is Something “Good Enough” to Ship?

Envelope by Ana María Lora Macias from The Noun Project

Envelope by Ana María Lora Macias from The Noun Project

No one really cares that you’re an overachiever. As creative professionals, we’re seldom satisfied with our output because it’s seldom perfect. But more often than not, good enough is perfect. Head of Creative & Design at HubSpot, Keith Frankel, shared a simple guide to recognizing when a deliverable can be considered “good enough.”

  1. It successfully solves the problem, addresses the need, or conveys the message intended.
  2. It is clearly and distinctly on brand.
  3. The quality of work is consistent with or above the level of previous work.
  4. It has been thoroughly yet objectively scrutinized by other qualified individuals.
  5. The final decision of preference had been left in the hands of the creator.

According to Ayelet Gneezy, Associate Professor at the University of California in San Diego’s Rady School of Management, “You really, really want to keep a promise, and anything beyond that is marginal, if anything…Don’t kill yourself trying to over deliver.”

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James Victore’s Tricks and Treats for Getting Motivated

If you’re struggling to feel motivated, using tricks or treats may be all you need to get the momentum going again. Illustrator James Victore swears by the unique approach to getting unstuck:

The first step of getting motivated: identify the type of motivation problem you’re having. Are you not motivated by the work itself (such as it doesn’t excite you) or are you lacking internal motivation (like a lack of energy because you didn’t sleep well last night)?

Once you know the type of motivation problem you’re having, you can motivate yourself with tricks like forcing yourself to work for one hour by using a stop watch, or promising a co-worker or peer that you’ll get something done in the next 30 minutes. Anything that can “trick” you into getting started on the work.

Alternatively, the treats approach is just that — a literal treat. If you make progress on (or finish) the work, reward yourself with something you’ve been wanting for a long time.

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Maximize Your Post-Conference Experience

Brainbox  designed by Simon Child for the Noun Project

Brainbox designed by Simon Child for the Noun Project

We’ve all been there. Attended an exhilarating conference, met fascinating people and left charged… Only to get back home, feeling overwhelmed, pulled quickly back into our day-to-day, to the point that we don’t follow-up or follow-through to maximize our conference experience.

On Linkedin Pulse, Nedko Nedkov offers strategies for acting on the learning that takes place at conferences. He suggests:

Before you leave the conference there’s two things you need to do. One, is schedule a 30 minutes meeting with your team for the very first day when you arrive back in the office. The second is schedule a one hour slot for yourself either on the very first day or the very next day when you get back.

During the team meeting, Nedkov suggests a conference debrief of what was learned and what’s to come, including any assignments. During your personal one-on-one, he suggests that you go through any conference notes and start identifying to-dos and what’s next.

The intentionality of sharing and considering what you learned and turning that knowledge into action can possibly make the difference between harnessing that electric energy that we feel after an awesome conference and feeling guilty that we did nothing.

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Avoid Failure with a Premortem

devils

Positive Feedback by Antonieta Gomez from The Noun Project

Projects fail all the time. Rather than wait for an ugly postmortem that often follows, why not try to help avert real failures before they happen by playing devil’s advocate.

In an interview with The McKinsey Quarterly, psychologist Gary Klein advocates for the use of what he calls a “premortem” in the planning phase, a concept he first introduced on HBR:

Before a project starts, we should say, “We’re looking in a crystal ball, and this project has failed; it’s a fiasco. Now, everybody, take two minutes and write down all the reasons why you think the project failed.”

By making it safe for resistors to voice their concerns during the planning phase, you can improve your project’s chance for success.

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Relevant: 5 Evidence-Based Ways to Optimize Your Teamwork

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The 4 Layers of Energy

thunder

Tony Schwartz of The Energy Project conducted what he calls The Energy Audit with 160 bank executives and discovered a series of startling things which further supported his theory that we’re all experiencing an under-recognized personal energy crisis:

Energy, after all, is the capacity to do work. In the face of relentlessly rising demand, fuelled by digital technology and the expectation of instant 24/7 responsiveness, employees around the world are increasingly burning down their energy reserves and depleting their capacity.

Tony urges us to think of our energy as divided into four layers:

Your physical energy – how healthy are you?
Your emotional energy – how happy are you?
Your mental energy – how well can you focus on something?
Your spiritual energy – why are you doing all of this? What is your purpose?

Building up all four of these elements for a greater capacity of physical energy will build the base for getting better at whatever it is you want to improve.

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