Insights & takeaways from Jeff Bezos' annual letter to shareholders
Recently, Jeff Bezos released his annual letter to shareholders, sharing his thoughts on the coronavirus pandemic and how Amazon is preparing for the future.
Rather than focusing on the long-term vision and planning of the platform that controls so much of global ecommerce, more than half of Bezos’ 2019 letter (understandably) is focused on the coronavirus pandemic and reiterates Amazon’s role in the disaster.
“One thing we’ve learned from the COVID-19 crisis is how important Amazon has become to our customers,” Bezos wrote in the letter. “We want you to know that we take this responsibility seriously, and we’re proud of the work our teams are doing to help customers through this difficult time.”
While Amazon’s COVID-19 efforts were the main highlight of his letter to shareholders, he also discussed other initiatives, like Amazon’s efforts to combat climate change and create jobs. Below are the key insights and takeaways from Bezos’ letter to shareholders that Amazon sellers should know.
Top 4 key insights
1. Amazon is focusing heavily on providing support during COVID-19 lockdown
Bezos clarifies that Amazon has “quickly prioritized the stocking and delivery of essential household staples, medical supplies, and other critical products despite the unexpected nature of the cause” and have temporarily closed their physical stores to prevent spreading the virus. They have shifted priority to other areas of Amazon’s marketplace including Whole Foods Market stores which have remained open, to provide fresh food and other goods for customers. They are also aggressively protecting their customers from exploitation. So far they have removed over half a million listings due price gouging, and suspended more than 6,000 selling accounts globally for violating fair-pricing policies.
2. Amazon is pushing for ecological change
Last year, Amazon has enforced several policies to help combat the effect that large corporations can have on the environment. They co-founded the Climate Pledge which challenges Amazon to become net zero carbon by 2040, are committed to reaching 80% renewable energy by 2024 and 100% renewable energy by 2030 and encouraged the Frustration-Free Packaging program on manufacturers and sellers.
3. Amazon cares for its employees
Amazon directly employs 840,000 workers worldwide, Globally, it supports nearly 4 million jobs and pays an industry-leading $15 minimum wage and comprehensive benefits for its staff. Full-time employees are given health insurance, a 401(k) plan, 20 weeks paid maternity leave, and other benefits to improve worker’s lives beyond pay. They are also spending $700 million to provide more than 100,000 employees access to training programs.
4. Amazon Web Services continues to be an invaluable asset
Much of the attention has been focused on its ecommerce operation, however, Bezos notes that Amazon’s highly used cloud computing service has been incremental in helping deal with the worldwide pandemic in multiple areas. AWS is being used for vital healthcare work, helping students continue learning online and generally keeping employees online and productive from home.
Top 3 takeaways
1. Amazon is becoming a necessity
Bezos claims in the letter that “Customers count on us to be there, and we are fortunate to be able to help. With our scale and ability to innovate quickly”. Due to Amazon’s unique focus on customer experience/ease, Amazon has developed into a vital service in keeping businesses and households running efficiently. Consumer demand continues to surge since the outbreak began and Amazon intends to quell it.
2. Amazon is doing everything possible to prevent employees from catching the virus
Amazon has increased sanitation regulations and have executed over 150 significant process changes in their operations network. Such changes include providing face masks, implementing temperature checks, and the usual sanitising expected from companies at this time, including providing disinfectant wipes and hand sanitizer across their network. Amazon is now developing its own incremental testing capacity, creating a new team to tackle one of the biggest challenges of the outbreak. The company is building its first lab and hopes to start testing frontline employees soon saying, “if every person could be tested regularly, it would make a huge difference in how we fight this virus. Those who test positive could be quarantined and cared for, and everyone who tests negative could reenter the economy with confidence.”
3. The coronavirus pandemic will only strengthen Amazon
Jeff Bezos signed off his letter stating that he is “optimistic” that the world will be strengthened by the coronavirus outbreak and that Amazon will “look beyond the immediate crisis for insights and lessons and how to apply them going forward”.
The future of Amazon
The last fiscal year ended with the surprise of COVID-19 and the world was turned upside down, Amazon included. Despite this, Amazon is still persevering during this time, although shaken, the marketplace remains strong and has in fact moulded itself into a form of relief from the pandemic and self-isolation. This year may bring new challenges for Amazon, but if there is one thing to know about Amazon, it is that the company is versatile. No matter what this year brings for ecommerce, it is likely that Amazon will adapt to it, like it has with the coronavirus outbreak. It is only a matter of time before we see exactly how they do so through Jeff Bezos’ letter to his shareholders in 2021.