Cory DoctorowApr 25, 2023

Amazon is *very* proud of its #flywheel: at first, the company offered subsidies to customers, which lured in sellers. Then, it demanded that those sellers lower their prices, which lured in more customers. With more customers, more sellers piled in. Faster and faster, the flywheel spins, creating the #EverythingStore:

https://fourweekmba.com/amazon-flywheel/

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Amazon Flywheel: Amazon Virtuous Cycle In A Nutshell - FourWeekMBA

The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

FourWeekMBA
Show threadCory DoctorowJan 21, 2023

And Amazon sold us Prime, getting us to pre-pay for a year's worth of shipping. Prime customers start their shopping on Amazon, and 90% of the time, they don't search anywhere else.

That tempted in lots of business customers - Marketplace sellers who turned Amazon into the #EverythingStore it had promised from the beginning. As these sellers piled in, Amazon shifted to subsidizing suppliers. Kindle and Audible creators got generous packages.

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