One of Amazon's biggest challenges in its early days was solved by an obscure book about lichen

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April 23, 2018 2:41 PM

Amazon CEO Jeff Bezos said he found a "loophole" that allowed him to overcome an early obstacle to success, Brad Stone writes in "The Everything Store."

Booksellers required the company to order at least 10 books at once, but Amazon didn't have that kind of sales volume yet, Brad Stone writes in "The Everything Store." So they ordered the book they needed and nine copies of an obscure book about lichen.
Amazon employees also wrote their own reviews of books that customers had ordered.

When Amazon first launched, it aimed to become nothing short of the world's largest bookstore.

But first, it had to work out some kinks.

As Brad Stone writes in his 2013 bestseller "The Everything Store," Amazon's distribution methods in the early days weren't exactly scientific. The company didn't hold any inventory of its own, and it could take a week or more for Amazon to deliver books to customers.

One of the biggest problems Amazon faced, Stone writes, was that book distributors required retailers to order 10 books at once. But the company wasn't yet making enough sales to do that. Stone highlights a tidbit from a Playboy interview with Bezos, published in 2000, that illustrates how they got around the issue.

According to Bezos:

"We found a loophole. Their systems were programmed in such a way that you didn't have to receive ten books, you only had to order ten books. So we found an obscure book about lichens that they had in their system but was out of stock. We began ordering the one book we wanted and nine copies of the lichen book. They would ship out the book we needed and a note that said, 'Sorry, but we're out of the lichen book.'"

Around the same time, Amazon figured out how to handle the issue of customer reviews of books. Stone writes that early employees and their friends wrote many of the first reviews.

Shel Kaphan, Amazon's first employee, found a book that a customer had ordered: "Bitter Winds: A Memoir of My Years in China's Gulag." He read the whole thing and wrote one of the book's first reviews. (It's unclear which review he wrote, but there is a 1995 review from "A Customer" that reads simply, "I love it.")

Today, Amazon is one of the most powerful businesses in the world, close to becoming a trillion-dollar company. But in that 2000 Playboy interview, Bezos joked about the company's early strategies coming back to haunt them: "One of these days we're going to get all those lichen books dumped onto our front lawn."

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