What constitutes an inflection point?
Bezos: It’s the size of the business — number of transactions or sales dollars. If you have a billion dollars in revenue, a hundred basis points in operational efficiency is a significant amount of money — it’s $10 million. Wilke: On the operations side, it’s also related to cycles of learning. When you get good enough at understanding a particular set of customers and a particular set of products, then you can start shifting what you’re focusing your attention on. You can really home in on efficiency. Bezos: And there’s a different inflection point which has to do with the number of customers. We’ve also reached a tipping point in the number of customers. When you have earned a relationship with a large number of customers, you get to do things on their behalf — always on their behalf, or it doesn’t work — that you can also monetize. That’s what leads to these deals like Drugstore.com, Living.com, Ashford.com, NextCard, and so on. Q: Do these deals indicate a shift in Amazon’s mod
