Dave Clark, The Man Who Built Amazon’s Delivery Machine(bloomberg.com)
bloomberg.com
Dave Clark, The Man Who Built Amazon’s Delivery Machine
https://www.bloomberg.com/news/articles/2019-12-17/amazon-holiday-shopping-the-man-who-makes-it-happen
37 comments
Well you just summed up my Amazon experience in a nutshell.
The only people who stay in Amazon management are sociopaths, megalomaniacs and the rare case of those who need the insurance. My pals in AWS, Zappos or Twitch all loved their jobs. Fulfillment is a special kind of hell.
The only people who stay in Amazon management are sociopaths, megalomaniacs and the rare case of those who need the insurance. My pals in AWS, Zappos or Twitch all loved their jobs. Fulfillment is a special kind of hell.
Jesus, i would not want this guy's job, nor would i want to work for him.
"His colleagues describe a demanding manager who is impossible to bluff. During the holidays, Clark’s team meets daily to review metrics about Amazon facilities around the world. Clark can zero in on any signs of trouble since he’s been scanning the same figures for 20 years. A key metric is the estimated delivery time shoppers see when they view a product on Amazon, which is broken down by geography. If the number is moving in the wrong direction, Clark demands an explanation and a solution. The culture is far from pleasant, but current and former insiders marvel at its effectiveness."
"His colleagues describe a demanding manager who is impossible to bluff. During the holidays, Clark’s team meets daily to review metrics about Amazon facilities around the world. Clark can zero in on any signs of trouble since he’s been scanning the same figures for 20 years. A key metric is the estimated delivery time shoppers see when they view a product on Amazon, which is broken down by geography. If the number is moving in the wrong direction, Clark demands an explanation and a solution. The culture is far from pleasant, but current and former insiders marvel at its effectiveness."
Having been at a very low level of this I can confirm the daily reviews. And yes it is extremely effective, if you have the right people.
The delivery time thing is, IMHO, ober simplified. Not sure if Clark is reviewing that life, but it is reviewed for the previous day. At least on the warehousing side of things, lead times are closely watched as these directly impact promised delivery dates for everything stored there. Same goes for transportation lead times. The worst thong to happen is the "red button", if that is pushed a complete warehouse looses the Prime status, meaning only standard delivery is enabled. Happens quite regularly so, and I even remember a Big Red Button when the whole network was affected. It just shouldn't be to long.
The most important metric at my level was missed shipments. More explicitly shipments missed due to the warehouses fault (ready to ship on time but not picked up by the carrier). Even worse, shipments that missed the promised delivery date. It speaks volumes about Amazon's logistics systems that all this could be figured out before 9 o'clock in the morning for the previous day. And it is one reason why you learn so much there.
Regarding people, Clarks ability to manage the network not only depends on the low level guys (like me back the day) but also managers in between. If these managers got their priorities right the system is less harsh then one might think. If managers play politics, not so much.
The delivery time thing is, IMHO, ober simplified. Not sure if Clark is reviewing that life, but it is reviewed for the previous day. At least on the warehousing side of things, lead times are closely watched as these directly impact promised delivery dates for everything stored there. Same goes for transportation lead times. The worst thong to happen is the "red button", if that is pushed a complete warehouse looses the Prime status, meaning only standard delivery is enabled. Happens quite regularly so, and I even remember a Big Red Button when the whole network was affected. It just shouldn't be to long.
The most important metric at my level was missed shipments. More explicitly shipments missed due to the warehouses fault (ready to ship on time but not picked up by the carrier). Even worse, shipments that missed the promised delivery date. It speaks volumes about Amazon's logistics systems that all this could be figured out before 9 o'clock in the morning for the previous day. And it is one reason why you learn so much there.
Regarding people, Clarks ability to manage the network not only depends on the low level guys (like me back the day) but also managers in between. If these managers got their priorities right the system is less harsh then one might think. If managers play politics, not so much.
What’s better? Waiting for a yearly review to talk about why something 6 months ago was low? It is better to adjust these problems as they came up.
That way everyone’s on the same page. There’s no doubt that X is an important metric and that your manager is informed of it everyday so that it isn’t a surprise when it comes to a review later on.
That way everyone’s on the same page. There’s no doubt that X is an important metric and that your manager is informed of it everyday so that it isn’t a surprise when it comes to a review later on.
I think it depends entirely on how it's done, really. Presumably the people who he reports to, have the same figures, so they will go into the meeting knowing that they should have thought a bit about what the problem is and should be able to suggest some solutions. It can be firm, but still friendly and collegiate. Or it could be monstrous blame-game.
Can be both and I saw both. Generally, Amazon's KPIs are pretty well aligned at least at the basic level. Also, at this level things are handled friendly. Well, as friendly as logistics during peak can be. Higher up things, at least from my experience, can be different. Together with Amazon's lean organisation, I was in regular contact with my director's director, this politics do spill down to the purely operational level. Not that great for operations. But unless there is a serious fuck up that causes a major disruption and potentially stock prices, this won't change.
That being said, the system is still so much more effective and efficient than any competition.
That being said, the system is still so much more effective and efficient than any competition.
It depends on how much you value money, I guess. Everyone that reports directly to Dave is probably going to be a VP making 800k/year-several million.
Most of his direct reports at L10 are going to be $M’s and for those with larger scopes, $5M+ is very easily possible. For someone like Dave on the S-team he’s going to be $10M+ and I couldn’t even begin to guess at how much over that.
It isn’t incredibly uncommon for L8 offers to be made around $1.5M USD today in AWS - the market is very competitive for excellent leaders in Seattle. Long-time employees can potentially make more: appreciation of their equity; you have specialized or niche knowledge which commands a premium; retained because AMZN can’t easily replace you.
In summary, senior leadership positions at Amazon are extremely well compensated. It’s very rare indeed to lose someone good to another company over money.
Throwaway because its taboo for an L8 or L10 to be openly discussing $M+ compensation packages.
It isn’t incredibly uncommon for L8 offers to be made around $1.5M USD today in AWS - the market is very competitive for excellent leaders in Seattle. Long-time employees can potentially make more: appreciation of their equity; you have specialized or niche knowledge which commands a premium; retained because AMZN can’t easily replace you.
In summary, senior leadership positions at Amazon are extremely well compensated. It’s very rare indeed to lose someone good to another company over money.
Throwaway because its taboo for an L8 or L10 to be openly discussing $M+ compensation packages.
L8 in AWS is =/= to L8 in Fulfillment.
You were in the Andy Jassy world- Pay is higher. The Dave Clark world pays less- despite what you hear elsewhere.
Every Large FC has an L8 director... they don't all make 1.5Mil. Smaller FCs are normally lead by lower levels but again... that pay would never scale.
You were in the Andy Jassy world- Pay is higher. The Dave Clark world pays less- despite what you hear elsewhere.
Every Large FC has an L8 director... they don't all make 1.5Mil. Smaller FCs are normally lead by lower levels but again... that pay would never scale.
What are the mechanisms in corporations that determine these figures? Always been super duper curious how the salary of a VP is "set"...
It is usually some combination of consultants using bogus logic, and other executives trying to bump their own pay by hiring very expensive colleagues.
I have never been convinced it is worth paying these kind of numbers. I have looked at all kinds of businesses, I have looked at businesses where productivity is power-law distributed (i.e. one good employee can be worth 10,000+ bad ones) and it never adds up...again, even if you look at situations where productivity is very unequal (which it isn't in almost every business, and very much isn't at Amazon)...it doesn't work.
One particularly toxic part of Amazon is that they pride themselves on only hiring the "elite". Well, if your market cap is hundreds of billions and you hire tens of thousands people a year...you aren't hiring the "elite" (genuinely, there are only three or four CEOs over the past five decades who are truly proven execs). So you have this awful culture where everyone views themselves as this unbelievably valuable "alpha dog". Inevitably, this results in them lighting huge stacks of other people's cash on fire (the real danger isn't hiring the 80 IQ guy, it is the guy with a 110 IQ who thinks he is a 160 IQ guy).
I have never been convinced it is worth paying these kind of numbers. I have looked at all kinds of businesses, I have looked at businesses where productivity is power-law distributed (i.e. one good employee can be worth 10,000+ bad ones) and it never adds up...again, even if you look at situations where productivity is very unequal (which it isn't in almost every business, and very much isn't at Amazon)...it doesn't work.
One particularly toxic part of Amazon is that they pride themselves on only hiring the "elite". Well, if your market cap is hundreds of billions and you hire tens of thousands people a year...you aren't hiring the "elite" (genuinely, there are only three or four CEOs over the past five decades who are truly proven execs). So you have this awful culture where everyone views themselves as this unbelievably valuable "alpha dog". Inevitably, this results in them lighting huge stacks of other people's cash on fire (the real danger isn't hiring the 80 IQ guy, it is the guy with a 110 IQ who thinks he is a 160 IQ guy).
The majority of AMZN's tech employees (ie. average SDE) know they are not elite and often talk about how they consider themselves failures for not being getting into better paying companies.
I didn't say either that employees are elite or that they think themselves to be elite. I said that is the hiring culture, which is something quite different.
You did say
> So you have this awful culture where everyone views themselves as this unbelievably valuable "alpha dog"
In my experience this may be true of upper management, but it simply isn't true of most employees.
> So you have this awful culture where everyone views themselves as this unbelievably valuable "alpha dog"
In my experience this may be true of upper management, but it simply isn't true of most employees.
There are consultancies that specialize in compensation benchmarking. One is Radford Consulting. They survey companies for pay info. Imagine they also get intel from clients.
As with every role, you pay the minimum you must pay in order to attract and retain the people with the experience you need.
Not at the VP but at the C level you can get a feel by reading SEC proxies. Amounts, composition and sometimes methodology/justification are included.
VP level at Amazon has a massive scope and Amazon pays very well at high levels + their stock has performed very well recently
Depending on the RSU package, more in the million range. Already for directors that wasn't so uncommon between, say, 2013 and 2018.
> banned third-party merchants from using (Fedex)’s ground network for the rest of the season
I read elsewhere that this ban is for Prime deliveries only.
So there are 3rd party sellers for Prime? I thought Prime is only for products fulfilled by Amazon.
Do these 3rd party Prime sellers get a cut of the $119/yr Prime fees?
If they don't get a cut of the Prime fees why would they offer Prime deliveries? Shouldn't they be offering 2-day free shipping to everyone Prime member or not?
I read elsewhere that this ban is for Prime deliveries only.
So there are 3rd party sellers for Prime? I thought Prime is only for products fulfilled by Amazon.
Do these 3rd party Prime sellers get a cut of the $119/yr Prime fees?
If they don't get a cut of the Prime fees why would they offer Prime deliveries? Shouldn't they be offering 2-day free shipping to everyone Prime member or not?
Turns out, Amazon has a program called Seller Fulfilled Prime. Sellers get the prime badge, and ship from their own warehouse.
If I had to guess, the seller tells Amazon where the product is located + their shipping cutoff time, and if the customer is in a geographic location that is serviced by UPS/FedEx/USPS from the seller's warehouse with 2-day transit time, and it's before the seller's cutoff, the Prime badge is shown.
More information here: https://services.amazon.com/services/seller-fulfilled-prime....
If I had to guess, the seller tells Amazon where the product is located + their shipping cutoff time, and if the customer is in a geographic location that is serviced by UPS/FedEx/USPS from the seller's warehouse with 2-day transit time, and it's before the seller's cutoff, the Prime badge is shown.
More information here: https://services.amazon.com/services/seller-fulfilled-prime....
So the sellers in this case don't even get a cut of the $119/yr Prime fees?
If that's the case why would the sellers even offer Prime shipping? Why not offer free 2-day shipping to everyone, including those who aren't Prime members as well?
If that's the case why would the sellers even offer Prime shipping? Why not offer free 2-day shipping to everyone, including those who aren't Prime members as well?
No, but as a seller, you pay the Amazon fulfillment fees whether the customer is Prime or not. It doesn't affect your fees.
If you are seller fulfilled prime, then you are not paying Amazon for fulfillment. Just the 15% cut they take and then you pay to ship it yourself.
It works out better for you if you have the scale to get cheaper rates than fba gives you (which include storage fees, freight to get the item to a warehouse, etc.)
If you are seller fulfilled prime, then you are not paying Amazon for fulfillment. Just the 15% cut they take and then you pay to ship it yourself.
It works out better for you if you have the scale to get cheaper rates than fba gives you (which include storage fees, freight to get the item to a warehouse, etc.)
> If you are seller fulfilled prime, then you are not paying Amazon for fulfillment.
That's where my question comes from.
If you're seller fulfilled prime, you're eating the cost of 2-day free shipping without a cut of the $119/yr prime membership fee. Then why would you offer 2-day free shipping only to prime members? It doesn't make sense. Why not offer 2-day free shipping to everyone including those who are not prime members?
That's where my question comes from.
If you're seller fulfilled prime, you're eating the cost of 2-day free shipping without a cut of the $119/yr prime membership fee. Then why would you offer 2-day free shipping only to prime members? It doesn't make sense. Why not offer 2-day free shipping to everyone including those who are not prime members?
> So the sellers in this case don't even get a cut of the $119/yr Prime fees?
That isn't mentioned in the linked Amazon information so my guess is no.
> [...] why would the sellers even offer Prime shipping? Why not offer free 2-day shipping to everyone[...]
FTA: "Your products listed with Seller Fulfilled Prime have increased chances to win the Buy Box. Winning the Buy Box means that when customers click on “Add to Basket”, their default option is to buy the product from you."
Also mentions that SFP is really for special case products. The called out reasons include:
- High-value items
- Products with seasonal or unpredictable demand
- Items with variations
- Slow-moving goods
- Inventory that requires special handling or preparation
That isn't mentioned in the linked Amazon information so my guess is no.
> [...] why would the sellers even offer Prime shipping? Why not offer free 2-day shipping to everyone[...]
FTA: "Your products listed with Seller Fulfilled Prime have increased chances to win the Buy Box. Winning the Buy Box means that when customers click on “Add to Basket”, their default option is to buy the product from you."
Also mentions that SFP is really for special case products. The called out reasons include:
- High-value items
- Products with seasonal or unpredictable demand
- Items with variations
- Slow-moving goods
- Inventory that requires special handling or preparation
Can confirm, it's all about the buy box. My company offers free 1 and 2 day shipping to all customers across all channels in as many zips as our fc network allows. SFP gets us the buy box with a way higher percentage and gives us a significant boost in our Amazon revenue.
In addition to a higher chance to win the buy box (the default add to cart action), there is a search filter for "Prime offers only" (it's literally the very first search facet filter on the left nav), and many customers have the belief that Prime means a higher certainty of delivery timing.
Seller fulfilled prime is a program that could be quite lucrative for sellers who qualify.
Seller fulfilled prime is a program that could be quite lucrative for sellers who qualify.
Dropshipping maybe. My team deployed the first Prime-enabled Dropship vendor in germany back the day. Not aware of any marketplace Prime sellers. But than it was quite a while ago and in Europe, so that isn't saying a lot.
This is all done because we as a society can't wait an extra day or week for something thats non-essential.
We can and have. This was all done (originally with partners) because it was necessary to make Amazon competitive with local retail. Amazon is now making shipping/logistics part of their "stack" because, at their scale, it removes a risky dependency, can reduce costs, may give them proprietary advantages, provide another service to sell, etc.
Taking loger to ship isn't less work.
Amazon is cutting out the middle man so they can abuse their delivery contractors and employees directly.
doh, and here I thought this was about british techno...
> “He knows every nook and cranny of the company.”
He'll show up at warehouses in the middle of peak (busy, holiday season) and demand changes to operational configurations that to against the standards set out by subject matter experts. Because Dave knows better. And Dave gets what he wants. As soon as he walks out the door, everyone has to put everything back the way it should be before the site has a high severity incident.
> habit of lurking in the shadows of Amazon warehouses and scoping out slackers he could fire
If the article didn't make it clear, he's a sociopath. Worse, he promotes other sociopaths to higher levels of management.
> The Man Who Built Amazon’s Delivery Machine
His claim to fame really is that he was in the right place at the right time. Dave Clark built Amazon delivery? No, Dave Clark was at the helm of operations when Amazon realized that if the company didn't build a delivery network asap, they'd be in trouble in a few years when demand outstripped (cheap) supply. If Dave were smart, that's something he'd have figured out years earlier.