Amazon's Jeff Bezos Became Richest Man In Modern History Just Ahead Of Prime Day

Jul 17, 2018
Originally published on July 17, 2018 6:21 pm
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ARI SHAPIRO, HOST:

Amazon hit an uncharacteristic snag this week. It rolled out a sales event called Prime Day, which was supposed to be Amazon's biggest shopping day of the year. For the first few hours of the sale, users reported glitches, problems logging in and even placing purchases. The company says more people still shopped in those first few hours this year than they did last year. NPR's Alina Selyukh has been watching closely and joins us here in the studio. Hey, Alina.

ALINA SELYUKH, BYLINE: Hi.

SHAPIRO: First, put this into context for us. Why is Prime Day such a big deal? Why are we here talking about it?

SELYUKH: Right. On one level, of course, it's a big marketing thing. Amazon simply made up the shopping holiday three years ago, but it serves a very powerful purpose. Because it's a sale day for members only, this is how Amazon draws people into paying $120 to become members of Amazon Prime. Today, you'll buy a membership to buy a cheap tablet during Prime Day. Tomorrow, you'll stock up your pantry with Amazon everything because you might as well. You don't want to waste that membership. Plus, the biggest Prime Day sales are on Amazon's own devices. They're giving discounts on the Alexa voice-activated smart speaker called Echo or the Fire TV Stick streaming device. All these items really loop you in into that Amazon world. And it is a really fast-growing world. Amazon has recently revealed that more than 100 million people pay for Amazon Prime membership.

SHAPIRO: I saw a lot of people yesterday tweeting about glitches. How bad was it?

SELYUKH: It was pretty odd. You know, pretty much as soon as this Prime Day sale started, friends and colleagues started sending me screenshots of error messages, which on Amazon involves a really cute puppy. And then it says something like, oops, something went wrong. But the problems were pretty widespread. I've seen thousands of reports of glitches and error pages on various websites that track this sort of thing, which is all a bit ironic because Amazon has a massive cloud-computing business.

SHAPIRO: Yeah.

SELYUKH: It's called Amazon Web Services, and its whole point is to host data and websites.

SHAPIRO: For other businesses.

SELYUKH: And Amazon has not said what caused all of these website problems. Instead, of course, it points out that people were still buying things really fast. By some estimates, shoppers were expected to spend more than $3 billion in just these 36 hours of Amazon sales.

SHAPIRO: Wow.

SELYUKH: And we should note that Amazon is one of NPR's financial sponsors.

SHAPIRO: Right. How are Amazon's rivals responding to this?

SELYUKH: You know, when I talk to retail executives from other companies and often ask them about the Amazon effect, I regularly hear this resentment, sort of why are reporters always so focused on Amazon? But then you look at this shopping holiday, which is totally invented by Amazon, and the responses are everywhere you look. Target, eBay, many, many other stores are hosting sales of their own today. Macy's is doing a bit of a wink toward Amazon. They're saying here's what you can buy for a price that's less than the Prime membership. And Walmart has been running ads promoting its own two-day shipping that does not require membership fees.

And there's also another kind of effect happening within Amazon. There have been reports of some Amazon warehouse workers in Spain and Germany taking advantage of all this attention on Amazon Prime Day and staging walkouts to demand better working conditions. Amazon has commented on that, saying that it is a fair and responsible employer and listing various perks it offers workers.

SHAPIRO: How is this all affecting Amazon financially? What's the bottom line look like?

SELYUKH: You know, if you look at Amazon's stock price, the trajectory is kind of up, up, up and up. The shares have been hitting a lot of all-time highs lately. And actually, CEO Jeff Bezos became subject of another bit of news this week and partially because of the Prime Day bump. His wealth is closely tied to Amazon stock. All of this means that Jeff Bezos is no longer just the world's richest man. He has now been declared the richest man in modern history. On Monday, his net worth topped $150 billion.

SHAPIRO: Billion with a B. NPR's Alina Selyukh, thank you.

SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.