Amazon.com 2002 Annual Report Download - page 6

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Infrastructure
During 1997, we worked hard to expand our business infrastructure to support these greatly increased
traÇc, sales, and service levels:
‚ Amazon.com's employee base grew from 158 to 614, and we signiÑcantly strengthened our
management team.
‚ Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of
our Seattle facilities and the launch of our second distribution center in Delaware in November.
‚ Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our
customers.
‚ Our cash and investment balances at year-end were $125 million, thanks to our initial public
oÅering in May 1997 and our $75 million loan, aÅording us substantial strategic Öexibility.
Our Employees
The past year's success is the product of a talented, smart, hard-working group, and I take great pride
in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to
be, the single most important element of Amazon.com's success.
It's not easy to work here (when I interview people I tell them, ""You can work long, hard, or smart,
but at Amazon.com you can't choose two out of three''), but we are working to build something
important, something that matters to our customers, something that we can all tell our grandchildren
about. Such things aren't meant to be easy. We are incredibly fortunate to have this group of dedicated
employees whose sacriÑces and passion build Amazon.com.
Goals for 1998
We are still in the early stages of learning how to bring new value to our customers through Internet
commerce and merchandising. Our goal remains to continue to solidify and extend our brand and customer
base. This requires sustained investment in systems and infrastructure to support outstanding customer
convenience, selection, and service while we grow. We are planning to add music to our product oÅering,
and over time we believe that other products may be prudent investments. We also believe there are
signiÑcant opportunities to better serve our customers overseas, such as reducing delivery times and better
tailoring the customer experience. To be certain, a big part of the challenge for us will lie not in Ñnding
new ways to expand our business, but in prioritizing our investments.
We now know vastly more about online commerce than when Amazon.com was founded, but we still
have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of
urgency. The challenges and hurdles we will face to make our long-term vision for Amazon.com a reality
are several: aggressive, capable, well-funded competition; considerable growth challenges and execution
risk; the risks of product and geographic expansion; and the need for large continuing investments to meet
an expanding market opportunity. However, as we've long said, online bookselling, and online commerce in
general, should prove to be a very large market, and it's likely that a number of companies will see
signiÑcant beneÑt. We feel good about what we've done, and even more excited about what we want to do.