America's No. 1 financial conglomerate

Chapter 483 The Passive Amazon

Seattle, Amazon headquarters.

The atmosphere inside the meeting room was in stark contrast to the bright sunlight outside the window; the atmosphere was so oppressive it was almost palpable.

Bezos stood in front of the floor-to-ceiling window, his gaze fixed on the huge "GG" sign above the road not far away. If you looked closely, you could see his cheeks twitching slightly, and the faint sound of grinding his teeth could be heard in the quiet conference room—an outward manifestation of his suppressed anger.

"What do you take me for? Netscape?" Finally, Bezos turned around, his voice filled with barely suppressed anger.

Anyone familiar with the history of the American technology industry will never forget the thrilling browser war between Microsoft and Netscape.

Back then, Microsoft erected a "GG" sign for Internet Explorer right outside Netscape's headquarters, causing a huge uproar in the tech world and becoming a topic of enduring discussion within the industry.

Today, although the GG sign for Flash Sale doesn't stand directly at the entrance of Amazon's headquarters, the GG signs scattered throughout Seattle's core business districts and major transportation routes act like mocking faces, constantly reminding Amazon that a powerful competitor has arrived.

This is an insult to him, a blatant insult.

This was also telling him that Amazon would repeat Netscape's mistakes, and even if it could survive in the future, it would be in an awkward situation of existing in name only.

"You despicable bastard, FXXK!" Bezos's emotions completely erupted. He clenched his fist and slammed it hard against the windowsill next to him.

Bezos was yelling, but the other Amazon executives in the meeting room remained unusually calm, as if they were used to it and had long been accustomed to Bezos's behavior.

Some people even subconsciously picked at their ears with their fingers, as if they were tired of hearing it all.

After Bezos had finished ranting and calmed down, he turned around and sat back down in his chair.

Seeing that Bezos's breathing had gradually stabilized and his complexion had returned to normal, Blackburn coughed lightly and then said, "I've arranged for people to conduct a comprehensive experience and analysis of the flash sale website, and based on the results so far..."

Blackburn paused at this point, then turned his gaze back to Bezos.

Bezos looked up and gestured, "Tell the truth, there's nothing to hide."

He knew that only by facing the problem head-on and understanding the true situation of the opponent could he formulate an effective response strategy; any attempt to gloss over the situation would only delay the opportunity.

Blackburn nodded and continued, "There's not much to say about the technical aspects. Whether it's the website's response speed or the security of the payment system, it's on par with Amazon."

It is simply impossible to widen the gap with flash sales by relying on technological advantages.

"As for the website's content," Blackburn's tone became serious, "according to our statistics, the variety of products offered by the flash sale platform far exceeds our expectations, and is even unmatched by Amazon and Walmart at present."

"Currently, our product offerings on Amazon and Walmart are still mainly focused on small everyday items, covering common categories such as food, clothing, electronics, and household goods. Although we have established a complete supply chain system and a stable customer base in these areas, there is a significant deficiency in the breadth of product categories."

"Flash sale platforms are completely different. I think they are more like Walmart, bringing all of Walmart's online products online, and even more abundant."

Blackburn turned on the projector screen, which displayed the product category catalog of the flash sale platform. "Their product coverage is extremely wide. It not only includes all our existing categories, but also adds large furniture products, covers a lot of engineering machinery, etc. It can be said that from daily necessities to industrial production equipment, from clothing and department stores to various electronic products, the flash sale platform has almost everything, truly realizing the concept of one-stop shopping."

"Aren't they operating on a self-operated model?" Bezos couldn't help but interject.

Such a massive product system would require astronomical amounts of capital to operate if a self-operated model were adopted.

Not to mention the huge amount of money required to purchase these goods, the investment in warehousing and logistics alone is enough to deter most people.

It's not that Ernst couldn't mobilize that much capital, but from a capitalist and investor's perspective, the return on investment was completely disproportionate and didn't conform to normal business logic.

Blackburn gave a wry smile. "Flash sales don't use the traditional self-operated model. They seem to be using our Amazon affiliate marketing model in reverse and innovating on top of that."

The affiliate marketing model was familiar to the Amazon executives present.

This is an innovative marketing plan that Amazon first proposed and implemented in 1996, and it is also one of the important strategies that enabled Amazon to quickly open up the market and expand its brand influence in the early stages.

Simply put, it treats all websites as Amazon's salespeople, allowing third-party websites to place links to Amazon products on their own pages. When users complete a purchase through these links, Amazon pays the affiliated website a corresponding commission.

The commission is usually around 5%, but recently Amazon has significantly increased the commission rate in order to seize the market, with the highest commission for some image products even reaching 15%.

These are mainly old goods that some manufacturers had stuck with, which were acquired by Amazon at extremely low prices.

With lower costs, Amazon chooses to offer more discounts to its affiliate websites, encouraging them to promote Amazon more actively.

"My information is that Flash Sale invited some brands to help them set up stores on the Flash Sale website. Flash Sale helps them with all the operations. Only when the items are sold will a portion of the commission be deducted."

"This model poses virtually no risk or cost pressure for brands and suppliers. They don't need to bear the costs of store operations; they only need to provide high-quality products to leverage the traffic advantage of flash sale platforms to achieve sales growth. Therefore, many brands are willing to use the flash sale channel for free and even proactively establish long-term partnerships with flash sale platforms."

After listening to Blackburn's detailed explanation, Bezos fell into deep thought.

Undeniably, the third-party seller onboarding mechanism of flash sales is indeed a highly attractive business strategy for upstream suppliers.

By attracting a large number of brands and suppliers to join, Flash Sale can not only quickly enrich its product categories and meet the needs of different consumers, but also leverage the brand influence of its partners to enhance its platform value and form a strong competitive advantage.

"Could we learn from this model?" Bezos raised his head, his gaze sweeping over the assembled executives, his tone carrying a hint of inquiry.

Although he harbored resentment and even hatred towards Ernst, in business competition, personal emotions always had to give way to the gains and losses of profit; making money was more important than saving face.

It must be admitted that the strategy of flash sales is indeed worth learning from.

If Amazon can successfully attract more brands to join, it will not only be able to quickly enrich its product range and make up for its lack of product variety, but also further consolidate its market position and form effective competition with flash sales.

Blackburn shook his head and said firmly, "I don't think learning this model makes any sense for us right now."

Bezos frowned, a hint of doubt and displeasure in his eyes, and looked at Blackburn. "Why?"

Blackburn did not answer Bezos's question directly, but instead turned his gaze to the CFO sitting on the other side of the conference table.

The other party understood immediately and continued, "According to our finance department's in-depth analysis, although the flash sale platform has attracted a large number of brands through the third-party seller onboarding mechanism, this model hides huge cost pressures."

"In order to attract more brands to join and stimulate consumer purchases, Flash Sale has provided large-scale discounts and subsidies to these third-party merchants."

"According to our calculations, the subsidies provided to merchants by Flash Sale far exceed the commission income that these merchants earn from selling goods on the Flash Sale platform."

"In other words, the more third-party merchants' products a flash sale platform sells, the greater its losses will be."

"Although we don't know the exact total sales of the flash sale, I've estimated it based on other data, and the flash sale is currently losing at least 20 to 40 million US dollars every day."

"Our financial situation is extremely tight, and we simply cannot afford such large losses every day."

"Are those nouveau riche blind?" Bezos thought of the fundraising ceremony held by Flashbuy in Saudi Arabia three days ago.

It was this financing that gave Flashbuy the confidence to lose money on such a large scale.

Blackburn's meaning is clear: inviting third-party merchants to join is not difficult, but if Amazon cannot offer the same level of incentives, it will backfire.

Consumers don't care if you lose money; they only know that when comparing the same product on Amazon and in flash sales, flash sales are cheaper.

When there are many such comparisons, it will leave consumers with the impression that flash sale products are cheaper than Amazon products.

"So we can only passively wait for the enemy to invade and seize our market share?" Bezos slammed his hand on the table in front of him, his tone filled with dissatisfaction.

"I think we need to firmly continue to implement the policies we have previously established," Blackburn said.

Seeing Bezos looking over and gesturing for him to continue, Blackburn said, "I don't know what the purpose of flash sales is, but they certainly didn't release any books or video products."

Bezos scoffed, "What other purpose could they have? They just want us to fight Walmart to the death in this field, so they deliberately let it go."

Blackburn thought the same way, aiming to force Amazon back into an industry specializing in niche markets.

"But this is also an opportunity for us." Blackburn revealed a smug smile, as if he had found a loophole in flash sales.

"We'll maintain our user engagement through books and video products. Flash sales can't keep losing money like this forever; once their subsidies end, that's when we'll launch our counterattack."

"We can contact those brands and reach an agreement with them first. When the flash sale subsidies end, that's when we'll let these merchants join us and start our uprising."

"So our main focus now must be Walmart, to steal Walmart's market share in the book and video products sector, and finally have a decisive battle with flash sales."

After Blackburn finished speaking, a brief silence fell over the conference room.

The senior executives present were all seriously considering his strategic suggestions, and in the end they all nodded in agreement.

It's not that I'm affirming the other party's strategy, but rather that, given Amazon's current situation, they simply don't have many options.

All Amazon can do now is to withstand this massive subsidy campaign during flash sales.