Of course it fits their business model. How else is Amazon supposed to sell products to people who do not own credit cards with which to buy Amazon products, but by giving them credit cards? And by giving these poor credit card-less individuals an immediate $20 credit Amazon ensures brisk $20 purchases from all its news customers. Think John. Think before you ask a question.

Posted by: Jack on September 23, 2002 11:22 PM

 

Uh oh, my wife says I've jumped the shark.

Posted by: Jack on September 23, 2002 11:27 PM

 

How does this fit in with their business model? I can't answer that question because I have no idea what their business model is, though I've been trying my best to figure it out.

So far, whatever they've tried hasn't got them any profits...

Posted by: MadMan on September 24, 2002 12:12 AM

 

Let us assume that their business model is buying books and music at wholesale rates and selling them at a 15% markup (come off it, Madman). And for heaven's sake, this card is just a loyalty program. John, do you think the Frequent Flyer program is consistent with American Airlines' business model?

Posted by: Nagarjun on September 24, 2002 01:00 AM

 

Bezos wants to sell everything, to anyone, at any time. He has nearly said as much when questioned about Amazon's diversification outside books and music. The only coherent business model seems to be "get big, fast." The patents and business alliances seem to indicate those inside Amazon see it as more of an ecommerce platform than anything else. Credit cards would seem to fit with that. However, they'll need more than twenty bucks to build a loyalty program.

Posted by: (the other)JS on September 24, 2002 08:34 AM

 

Credit cards are just something big stores do. Virtually every U.S. department store has its own card and offers its customers a discount on their first purchase. The one time I seriously looked at a dept store card, it had a 20% APR. Not only did I turn down the offer, I thought less of the store for treating me like a fool.

Credit addiction goes global -- "America's latest cultural export is the buy-now, pay-later shopping habit"

I pay cash for virtually everything, so someone a tad more savvy should assess the details of Amazon's offer.

Posted by: Jack Schonchin on September 24, 2002 09:33 AM

 

The deal itself? The reward give-back is pretty much in line with what other programs offer, the difference being that your points sound like they are only good at Amazon. Other programs such as American Epxress' "Membership Rewards" offer greater flexibility, but there are usually fees attached. (Does this card have an annual fee? I didn't see a reference.)

Does it fit their model? I'm with Nagarjun that this is a loyalty model, won't appeal to those not already using Amazon, and is a way of giving them an edge for those customers who purchase from both Amazon and B&N. It can't hurt: and First USA (their bank partner) has enough experience to know what it takes to structure these.

Posted by: Frank on September 24, 2002 11:57 AM

 

It's great for their business model.

They have a revenue sharing deal with the bank, they implement a loyalty program that they don't have to manage (the bank does) and they start on the road to issuing financial service, buy eTrade Bank and then dominate the world.

Simple really...if only they did this earlier and stopped telling us about pro forma profits ;)

Posted by: JB on September 24, 2002 12:38 PM

 

I know from personal experience that it is possible to buy from Amazon without a credit card -- you mail them a check! It's not as speedy, but it's possible.

Posted by: Anita Rowland on September 24, 2002 07:27 PM