How Amazon got its first users?
Back in 1994, Jeff Bezos dug up some data about the fast growth of the internet – it was growing at 2,300% each year. He took the time to craft a solid customer acquisition strategy, and came up with a list of 20 different business ideas, focusing especially on books and music. He chose to sell books because there were a lot of them – over 3 million active titles at any given time. That gave birth to the Amazon business model.
Thanks to a $300,000 loan from his parents, Bezos was able to start Amazon in his garage. The name “Amazon” was because he wanted it to show up first on internet site rankings like Yahoo. To boost website traffic, he utilized creative SEO techniques, such as using different website addresses and links from other sites under construction, which made it difficult for visitors to tell that Amazon was behind them.
One of the biggest drivers of website visitors and an important part of the Amazon growth tactics was its affiliate program. Website owners could earn money from Amazon by placing a link to the site on their pages. This affiliate marketing strategy resulted in many website owners joining, having a big impact on Amazon's growth, even before MySpace was around.
When Bezos needed to stock up on books, he encountered a challenge with ordering from bookstores like Baker & Taylor. The minimum order was 10 books, which was too many for him. He found a clever solution by always ordering the book he needed plus 9 copies of a book about lichens that was always out of stock. This allowed him to receive the book he wanted, along with a note from the bookstore saying sorry for not being able to send the 9 lichens books.
It took the Amazon business model 5 years to turn a profit, but Bezos and his team worked hard and poured all their resources into growing the company.
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