The making of Amazon Prime, the internet’s most successful and devastating membership program
An oral history of the subscription service that changed online shopping forever.
It’s easy to forget now, but Amazon wasn’t always the king of online shopping. In the fall of 2004, Jeff Bezos’s company was still mostly selling just books and DVDs.
That same year, Amazon was under siege from multiple sides. Some of its biggest competitors were brick-and-mortar chains like Best Buy, which was still in expansion mode at the time, with sales growing 17 percent annually. Toys ‘R’ Us sued Amazon in a high-profile battle, alleging it had violated an agreement the two companies had for the toy store chain to be an exclusive seller on Amazon.com.
And during the holiday season, Amazon’s website suffered repeated outages, drawing the wrath of customers and the press alike.
Amazon was worth $18 billion at the time. Its online rival eBay, on the other hand, was an internet darling worth nearly $33 billion. If you were an outsider to both companies and you had to pick one as the future Everything Store, it might have been hard to imagine Amazon as the victor.
But 15 years later, Amazon is worth more than $900 billion, compared to just $33 billion for its old foe eBay, which spun off its (more valuable) payment division, PayPal. And the Amazon Prime membership program is perhaps the biggest reason why.