Amazon says free shipping needs years before it brings full benefits


Thursday, May 29th 2003, 12:00 am
By: News On 6


SEATTLE (AP) _ Amazon.com founder Jeff Bezos has been touting his company's free-shipping offer for months, but it will be years before the Internet retailer sees the full benefits of the promotion, he told shareholders.

Amazon.com, which ships select orders totaling $25 or more for free, plans to spend about $100 million on the promotion this year. But many customers don't know about the offer, Bezos said, meaning that it could be five years or so before Amazon.com garners the new customers and higher sales the promotion is designed to encourage.

``This is a kind of investment,'' he said Wednesday. ``It's successful enough that I consider it a serious error on the part of this management team that we didn't figure this out three years ago. ... I wish that we had gotten started on that job earlier.''

In his speech, Bezos found time to demonstrate a Segway Human Transporter, and plug a robotic lawn mower, the company's price-cutting on books, and its plan for selling ``anything with a capital A.''

Shareholders elected six directors to the board, and handily voted down a proposal to link the price at which executives can exercise stock options to how well the company performs compared to its competition.

The Segway self-balancing scooter has been Amazon's best-selling item, by total dollar value, selling for about $5,000 each, said Bezos, who picked a shareholder out of the crowd to try it. He did not disclose the number of Segways sold.

He also highlighted the company's financial performance, pointing to its sales growth each year.

Amazon.com, however, has reported net profits in only two quarters since going public in 1997.

The company will expand into new categories this year, although Bezos declined to say what. Some analysts have suggested sporting goods as a possibility.

After the meeting, Bezos said the company has been looking into selling digital music over the Internet, in which consumers can download songs onto their personal computers or burn them onto compact discs. Several companies, including Listen.com and Apple Computer Inc. offer such services, but Bezos said a number of problems, from working with record labels to making it easy for customers, remain to be resolved. He declined to say when Amazon might get into the burgeoning business.