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Amazon's Strategy to Get You to Spend More

Techstination feature for Thursday, January 24, 2002's strategy to get you to spend more. Bloomberg Boot Camp, a report on today's technology. There were skeptics who wondered whether it would ever happen, but finally made a profit in the fourth quarter of last year. And CEO Jeff Bezos is thanking customers who spent more than a billion dollars on the site during that time. Amazon's offer of free shipping for orders over 99 dollars was a key factor... according to Bezos... and so the company is making that offer permanent...

"We've seen that customers respond to that. And that, of course, is the bet on free shipping." So if somebody were online and their total came to maybe seventy or eighty dollars... they'd be prompted to spend a little more to get the whole order shipped for free. "That's right, that's one of the ways that this increases revenues is that people will reach for that ninety nine dollar hurdle. The second thing that happens is that there are another group of customers who otherwise just might not shop this way at all and so you kind of open your doors to those customers as well."

Bezos doesn't expect the skeptics to go away... and says they shouldn't. But he says...his company is here to stay...

"Amazon is here to stay. We are building a lasting company. We care very passionately about this company and the future of it and we love serving customers. Twenty five million customers shopped with us in the last year and I'd like to express our deep gratitude to each and every one of them."

Amazon CEO Jeff Bezos. Bloomberg Boot Camp, I'm Fred Fishkin.