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there has never been a company quite like Amazon
conceived as an online bookseller Amazon has reinvented itself time and again
changing the way the world shops read then computes
amazon has $225 million customers around the world its goal is to sell
everything to everyone the brainchild Jeff days as Amazon prides itself on
disrupting the traditional way of doing things
a few weeks ago the company announced it was launching Sunday
delivery tonight for the first time you'll be introduced to perhaps Amazon's
boldest venture ever
over the last month 60 minutes was granted unprecedented access
inside Amazon's operations if you have ever wondered
what happens after you've clicked in place an order on Amazon
take a look
if there's such a thing as Santa's workshop
this would be a a 1.2 million-square-foot distribution center
the size are more than 20 football field gearing up for the holiday shopping
season
there are 96 at these warehouses worldwide
what Amazon calls fulfillment centers tomorrow
on what is known as Cyber Monday it is expected that more than 300 items
a second will be ordered on Amazon if you go back in time eighteen years
I was driving the packages to the post office myself
and we were very primitive internet is Jeff bays ohs is the founder and CEO on
Amazon
with an estimated worth a bit least $25 billion dollars
he sold his first book on Amazon in another era
back in 1995 part of what
Amazon customers expect yes we want it now
yes what's happening at the pop film centers that have made that possible
the secret is running like our seventh generation a fulfillment centers
and we have gotten better every time when I was jerry packages myself
on my visualizations a success as we might one day be big enough we could
afford a forklift
you got or we got forklifts there is very little
Amazon does it have right now we're really in the center at work is the
physical manifestation
a first make a selection Amazon vice president day
Clark showed us how the process begins after the products arrive into the
building
they are immediately scan the products are then placed by stackers it would
seem to outsiders
as a haphazard way a book on Buddhism
and Zen resting next to missus Potato Head here's what I wanna know
this is a stripper alright yeah it sitting next to
encyclopedia world history that doesn't make any sense to me
was it makes ST UNIT it does what because those two things you look at
how these I'm in the bin the all optimized for
utilizing the available space the icy and we have computers
in algorithmic work that tells people the areas in the building that have the
most space to put product in that's coming in at that time
amazon has become so official with that stacking
it can now store twice as many good did centers as it did
five years ago anything you want on on earth you're gonna get from a
anything you want on heard you gonna get for us
that's where we're headed devil want your orders placed a so-called pitkin
batter walked the aisles
plucking and scan your items before placing them in bands
those then to bed they wind up in front of a packer
who knows exactly how big a box to use based on the way tantamount to buy items
your address is slapped onto the box and then a picture
is taken up your address label gadgets known issues
sort and divert the boxes to the appropriate spiral chute based on the
postal code
this accelerates the delivery process the boxes are then loaded onto a waiting
trucks
which are assigned to protect the region's Raleigh North Carolina in this
case
Amazon uses more trucks than planes
because so many distribution centers have been built new customers
if you can do this with all these products what else can you do
you guys can organize the world you gotta start somewhere
but the company is also started same day deliveries up groceries
into cities mill vegetables
and dry goods to name a few items
Amazon price began in Seattle in only after
five years how are you as it expanded to Los Angeles
first what is it you tryna learn the state new
five years to learn how to make it make financial sense
you know what's not to love you order the groceries online we deliver insured
or
up I but
that's very expensive but is this the holy grail for Amazon I can deliver it
on the same
day its a possibility if we can make this model work
it would be great because it extends the
range of products that we can solve here we go Amazon is now flowing into other
areas
far removed from its original mission as an online booksellers Amazon
fashion launch this fall sells high-end clothing
tell me what is Amazon
today I would define Amazon by are big ideas which are
customer centricity putting the customer at the center everything we do
invention we liked pain here we like to explore
like good down dark alleys and see what's on the other side
on the other side Amazon's online retailing
is a business customers know little about it is called
Amazon Web Services AWAs in may soon become
Amazon's biggest business to keep track of its massive
online orders Amazon built a large
and sophisticated computing infrastructure Amazon figured out it
could also expand that it but structure to store data and run web sites by
hundreds of thousands of companies
and government agencies on what is known as the cloud
how much of the Internet do you run it's a good question
a.m. it's a lot though what a lot what's that neighbor
I could tell you this most internet startups
and a lot a big Internet companies run on top okay to your Netflix
very famously and you can say oh as for odd because
Netflix in a way as a competitor Venice on does it in Netflix who else uses a
dubious
0 and big enterprises I'm
big government institutions like the CIA the CIA
does that prevent any conflict for you the fact that you provide the cloud that
the CIA uses for its data I don't think so
we're building what's called a private cloud for them charlie because they
don't want to be on the public cloud but the company continues to branch out an
Aries the public can see
and touch people read books the same way for centuries until Amazon introduced
the Kindle
e-reader this is the an amazon has just released its Kindle Fire HD ext cab lit
in typical Amazon style without making a profit on the device
so you sell this a break-even we saw this a break even and then we have to be
there in 10 margins are very thin margin
but we hope to make money when you sell all this talk about that's always been
your philosophy exactly Bastos believes low-cost
insurer customer loyalty to Amazon even
it but at the expense of profits Amazon is one of the rare companies that on a
quarterly basis
shows little profit and yet his beloved by investors
in the long run if you take care of customers that is taking care
shareholders we do price elasticity studies
and every time the math tells us to raise prices so why don't you do it
because doing so would erode trust
and that erosion of trust would
cost us much more in the long term that Longview
Bastos believes gives Amazon a distinct edge
that long-term approach is rare enough
the it means you're not competing answer many companies because most companies
want to see a return on investment in
you know one to three years you don't care about that I care but I'm willing
for to be five six seven years
so does that change in time-line can be a very big
a.m. competitive advantage
for example Amazon's profits are redirected to building more distribution
centers
like this one in New Jersey the more centers it constructs
the close to the customer and the faster the delivery
and every time a new center goes up publishers and traditional retailers
shutter a lot a small book publishers and other smaller companies
worried that the power of Amazon give them no chance
you gotta earn your keep in this world win you invent something new
if customers come to the party is disruptive to the old way
here but I mean there are areas where your power so great
and your margin you're prepared to make its ok then
that you can drive people out a business and you have that kind of drink and
people worried is Amazon ruthless in their pursuit
market share the internet is disrupting
every media industry Charlie you know people
can complain about that but complaining is not a strategy
Amazon is not happening to book-selling the future is happening to book-selling
for her
up Amazon is also pouring money into a ritual television programming
that can be streamed to Amazon customers
like its first series out the house in a way you look so small you stock up to
the white house again
last night didn't you take comedy written by Doonesbury creator Garry
Trudeau
about four Republican senators who live in the same town house watkins I
Amazon didn't select the show the conventional Hollywood Way
out the house was picked at a thousand up scripts
with the help of hours on customers who reviewed the show
you are using your customer base
correct to tell you rather than
the opinion up some zachariah Hollywood program
we're changing the green lighting process and senator few
studio executives deciding what gets green light to call tastemakers yes
we're using but some people would call crowd-sourcing
to help figure that out what other industry will Amazon disrupt add
Amazon's secret lab 126 in California
designers and engineers are experimenting on next-generation devices
the contents of which are eagerly speculated about
are you working on a set top box that will allow people to watch streaming
video not need to have cable television
I can't answer that question i kno who want to talk about the future roadmap
a bar devices so I have to just
ask you to stay tuned soon instructor
but during our visit to Amazon campus in Seattle
Bezos kept telling us that he did have a big surprise
something he wanted to unveil for the first time
let me show you something. oh man! Oh my God!
this is is our octocopter
These are effectively drones but there's no reason that they can be used as
delivery vehicles.
Take a look up here so I can show you how it works. We talk about delivery here
we're talking about delivery so there's an item going into the vehicle
I know this looks like science fiction- it's not.
this is early, this is still years away
It drops the package. You come get your package
and we can do half hour delivery. half hour deliver? Half hour delivery.
we can carry objects we think up to five pounds which covers
eighty-six percent of the items that we deliver. And what is the range between
the fulfillment center
and where you can use is within this 30 minutes? t These generations of vehicles it
could be a 10-mile radius
for a fulfillment center so, in urban areas, that actually cover very significant
portions of the population and so it won't work for everything
you know we're not going to deliver kayaks table saws this way
these are electric motors so this is all electric it's very greens better than
driving trucks around
this is all an R&D project With drones there somebody sitting somewhere
in front of a screen
not these these are autonomous see you you give them instructions which GPS
coordinates to go to
and they take off and they fly to the GPS coordinates. What's the hardest challenge
in making this happen? The hard part here
is putting in all the redundancy all the reliability
all the systems you need to say, look, this thing can't land on somebody's head
while they are walking round other neighborhood. That's not good. You know I don't want
anybody think this is just around the corner this is years additional of work
from this point. but years means 5? 10?
I'm an optimist, Charlie. I know it can't be before 2015 because that's the
earliest
we could get the rules from the FAA
my guess is that's that probably a liitle optimistic but could it be,
you know, four or five years? I think so,
it will work and it will happen and it's gonna be a lot of fun
with the drones possibly taking flight in the not too distant future
Amazon is raising the stakes in the race for faster deliver
Jeff Bezos believes the company has no choice
companies have short life spans Charlie and
Amazon will be disrupted one day. And you worry about that? I don't worry about it
because I know it's inevitable.
companies come go and the companies that are the
shiniest and most important of any era
you wait a few decades and they're gone and your job is to make sure that you
delay that date
Sure. I would love for it to be after I'm dead!
intrigued by the thought of Amazon drones landing at your doorstep go to 60
minutes overtime.com
to hear and see more