When Jeff Bezos launched Amazon in 1995, the Internet was still a novelty. Mark Zuckerberg was in middle school and Twitter hadn’t made a peep. The beauty of Bezos’ idea lay in its simplicity. Amazon would operate as a bookstore, supplying reading material to customers all over the country. It sounds straightforward, but when you look at a few of the details of the plan, it’s easy to understand why some people laughed at Bezos.

First of all, there was Bezos’ interesting take on inventory management. He wanted the company to be able to operate without its own warehouses. The company would hold very few items in stock and if something that was not in stock was ordered, Amazon would order it from a wholesaler and then ship it to the customer. Next, there was his assurance to the company’s investors that the company would probably not turn a profit for at least five years.

This turned more than a few heads, but in the end, Bezos got the last laugh. Amazon has since grown into the largest online retailer in the world. People can buy everything from cosmetics to CDs to car parts on Amazon. Bezos withstood nearly seven years in the red before his company finally turned a profit.

Lesson One – Be Focused

This illustration should provide small business owners with a good example to follow. The first lesson to be learned from Amazon’s success is that you need to focus on your core functions. For Amazon, that was putting goods into the hands of customers. That sounds simple enough, but think about how easy it is to become overwhelmed with payroll and accounting worries.

How many times have you lost sleep wondering if your inventory management system was the best fit for your company? If you need to outsource these functions, in order to focus on your business’ core mission, do it. It will be worth it. Amazon outsourced its order fulfillment after a couple of years, and this was big news. The company made a name for itself because of customer satisfaction, but this outsourcing allowed Amazon to focus on growing and streamlining its other services.

Lesson Two – Interact with Customers

Next, you should try to turn your customer’s experience as social as possible. Amazon was a huge innovator in the development of referral programs and comment sections on web sites. The company even has patents on some of their social shopping innovations. If you’re able to put a comment or review section on the site, do it. Not only will it keep you and your employees accountable, it will give customers a chance to voice their opinions and respond to other people’s comments.

Companies should also take advantage of the social media opportunities that Facebook and Twitter present. These allow your business to form real relationships with your customer base. People are much more likely to buy from a person than they are from some faceless company. Social media helps give your company a face.

Lesson Three – Be Persistent

Finally, don’t give up. As I mentioned before, Bezos experienced seven years in the red before he was able to dig himself out. Just because your very first quarter isn’t all champagne and sky-high profits doesn’t mean you should close up shop immediately. Examine what is not working and fix it.

In Amazon’s case, Bezos expanded the operation from out of his garage once he realized it was growing as fast as it was. Then he began purchasing warehousing space because he realized his original plan was not sustainable and not conducive to the growth of the company. If something isn’t working, correct it, but don’t declare it dead without at least trying to diagnose the problem.

About the Author: Ordoro is order management software for online stores, allowing you to spend more time growing your business and less time keeping your backend operation straight.

Top image: Daniel Broche

Bottom image: Alan Levine