Jeff Bezos made this speech back in 1998. Amazon first opened its doors in 1995, so this was still very early in its life. Still, enough time had passed that a lot of lessons were learned, business strategies evolved.

There’s a lot of discussion on the value of frugality. For example, what do you do when your customer orders one book, but the wholesaler has a 10-book minimum?

The problem was, the wholesalers had 10-book minimum orders. I tried to negotiate with them and said, “Let us just pay a small fee, and you waive the 10-book order,” and so on. But they wouldn’t go for it. So we figured out a loophole. It turned out that you just had to place an order for 10 books; you didn’t actually have to get 10 books. We found an obscure book on lichens that none of our wholesalers actually carried.

So whenever we wanted to order one book, we ordered the book we wanted, and then nine copies of this lichen book. They would deliver the one that we wanted, along with a very sincere apology about not having been able to fulfill the nine copies of the lichen book order. That worked very well for exercising our systems. I’ve since talked and joked at length with the people at these companies about this. They actually think it’s very funny.

And this on the value of honest reviews:

Often, publishers are surprised to find out that we allow negative reviews to appear on our website. You should read the reviews for the book Tenth Justice, which is a new beach book. Our customers have just destroyed that poor book. If you were thinking of buying it and you came to our website, you’d think, “Well, maybe I’ll look for something else.” On the other hand, there’s a book called Endurance; it’s a book about a guy named Shackleton, whose boat, while on an Arctic expedition, got crushed in an ice flow. He had to spend six months with his men, 28 men, hiking out of Antarctica, and they made it. Not a single man was lost.

It’s one of the greatest stories of all time of endurance and human spirit. There are dozens and dozens of customer reviews about it; this is an old book, originally published in 1956. For months, this book has been on the top 100 best-selling books on Amazon.com, strictly fed by these customer reviews. I challenge you to read the customer reviews on that book and see if you can resist buying it.

Terrific read.