[Correction: Jeff Bezos’ quote about Prime membership has been corrected since this post was published. Bezos said it is the company’s goal to make it irresponsible to not be a Prime member; he didn’t say it was currently irresponsible to not be a Prime member.]
Amazon CEO Jeff Bezos addressed the company’s shareholders this morning on a wide variety of topics — providing the company’s latest outlook and insights on everything from its urban campus in Seattle to the fundamental “pillars” of its business: Amazon Prime, Amazon Web Services, and the Amazon Marketplace.
Bezos opened the company’s annual shareholders meeting in Seattle’s Fremont neighborhood, by noting two major milestones: Amazon reaching $100 billion in annual sales overall, faster than any other company in history, and Amazon Web Services reaching a $10 billion annual run rate faster than Amazon did.
He also provided an update on the company’s Amazon Prime membership program, saying that Amazon has seen 51 percent year-over-year growth in paid memberships. He repeated that there are “tens of millions” of Prime members but didn’t give a number. The company plans to continue adding new features and services to Amazon Prime, expanding further beyond its core benefit of fast free shipping on more than 30 million items.
“Our goal with Amazon Prime, make no mistake, is to make sure that if you are not a Prime member, you are being irresponsible,” he said, underscoring the significance of the $99/year membership program to the company and to many of its customers’ lives.
Bezos noted that customers who watch Prime Video are more likely to convert from a free trial of Amazon Prime into paid membership, and to renew. Repeating a variation of one of his favorite lines, he noted, “We may be the only company to ever successfully convert Golden Globe wins into more shoe and diaper sales.”
He also announced that Amazon will repeat its Prime Day promotion sometime in the next few months. The first Prime Day was an online Black Friday-like shopping event created by Amazon to celebrate its 20th anniversary and reward Prime members with discounted products, some of which drew complaints.
“It far surpassed our highest hopes when we launched Prime Day,” said Bezos, adding that it turned out to be “a fantastic member acquisition day for us” and also great for third-party sellers.
Amazon Prime dovetails with Amazon Marketplace, where third-party sellers seeing a spike in sales when their items become eligible for Prime shipping, Bezos said. Nearly 50 percent of total third-party units on Amazon are now fulfilled through Fulfillment by Amazon, or FBA, he said.
As in years past, the Amazon meeting was a platform for a variety of advocacy groups. This year they included a women’s rights group that flew a plane over the meeting urging the company to stop selling Donald Trump products.
Shareholder proposals related to environmental reporting, human rights in Amazon’s supply chain, and documentation of political contributions were each voted down by shareholders, although each garnered more than 20 percent of the shareholder vote.
On the topic of Amazon’s growing campus in Seattle, Bezos reiterated that he believes it was a “terrific decision” to grow in the urban area, despite the higher cost for the company. He cited the quality of life, the better commutes for employees, and also the dynamics of being in the city.
“That feeling that comes from interacting with so many people in an urban area is going to lead to a more vibrant product offering from us,” he said.
Bezos fielded a handful of shareholder questions related to Amazon Web Services, saying that the AWS team “continues to innovate at incredibly fast speed,” with 722 new services and major features added in 2015, up from 516 new features and services the previous year.
“I don’t expect us to be the only winner in cloud computing,” Bezos said in response to a shareholder question, without mentioning Microsoft Azure, Google Cloud Platform or others by name. However, he said, the company has a seven-year head start. He said that’s due in part to skepticism early on that anyone would “buy mission critical infrastructure services from an online bookseller.”
“That head start shows itself mostly in the quality of the features and services we provide,” said, noting that “brilliant computer scientists” have been improving them for a decade now.
The meeting also highlighted Amazon’s contributions to the community, including its role in addressing homelessness, its efforts to hire military veterans, and even its community banana stand at its Seattle headquarters. Here are more highlights via our Twitter feed. We’ll have more coverage shortly.
Re: Amazon's Seattle campus, @jeffbezos says that interacting with so many people in an urban area leads to more vibrant products.
— GeekWire (@geekwire) May 17, 2016
— GeekWire (@geekwire) May 17, 2016