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Welcome to Amazon-dot-everything

Marketplace Contributor Oct 25, 2012

Welcome to Amazon-dot-everything

Marketplace Contributor Oct 25, 2012

Jamie Nash is a screenwriter who lives on the outskirts of Baltimore. And he’s been trying to break into Hollywood. He shopped a couple of scripts around there, got some interest, but no sale. Then, ka-ching. His two comedies got optioned.

Who’s the big movie studio that snapped them up? Amazon.

Amazon Studios is the company’s new movie production arm, and it’s optioned everything from horror movies to kids’ TV shows. Nash says when he tells friends and family the movie house he’s working with, they scratch their heads.

“They kind of look at me and they’re like,`You mean the book people?’” Nash said.

You know Amazon, the book people, who have laid waste to brick-and-mortar booksellers. And Amazon the retail people, selling everything from diapers to diamonds. But now you’ve got Amazon in movie production, Amazon in banking, Amazon making tablet computers and running a massive cloud computing system that NASA and Pfizer use. What isn’t this company doing?

“Amazon’s always been very interested in becoming a utility,” says Brian Walker, an analyst with Forrester Research. “A backbone so pervasive in an industry that you can’t imagine it not being there, and it may not necessarily operate on a fat margin, but it’s everywhere.”

Here’s why, says Walker. If Amazon can make a hit TV show, it can lure lots of people to its online streaming and away from Netflix. If it can make loans so merchants sell more stuff through Amazon, the company gets more commissions plus interest on the loans. If it sells tablet computers, it can sell more e-books.

But come on, no company can do everything perfectly. Amazon is tightlipped about how these ventures are doing. Walker says Amazon risks spreading itself too thin.

“For Amazon, it is a concern that they’re getting involved in so many different things, can they really be good at all of it?” Walker said.

Still, Amazon has a pile of cash and even more ambition. So what do you do if you’re a business owner and Amazon is coming after your market? Like the world of plumbing supplies.

Outside the warehouse of Pacific Plumbing Supply in Seattle, Larry Solomon points out stacks of industrial pipe he says one of his customers recently bought from Solomon is chief executive of Pacific Plumbing Supply.

He’s long competed with Amazon on small things like garbage disposals or faucets. Now Amazon’s selling big stuff like pipes and water heaters. Solomon thinks it’s going after Home Depot more than a company like his. Still, he can’t afford to ignore the likes of Amazon.

“We’re not in any way dismissive of the monster headquartered here in Seattle,” Solomon said.

But here’s the thing — on the one hand, he calls the company a monster. On the other, he shops on Amazon all the time.

“Most recent purchase — I bought my grandson’s Halloween costume,” Solomon said with a laugh. “He wants to be a policeman.”

Can’t live with it, can’t live without it. Lots of companies have complicated relationships with Amazon these days, and some may be about to. UPS ships millions of orders for Amazon. But Forrester analyst Brian Walker says he wouldn’t be surprised to see Amazon start its own shipping business — it already has a fleet of trucks and logistics expertise.

Message to Big Brown — watch out.

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