Power Players

This employee's suggestion to Jeff Bezos doubled Amazon's productivity in its first month

Amazon CEO Jeff Bezos, founder of space venture Blue Origin and owner of The Washington Post.
Alex Wong | Getty Images News | Getty Images

In 1994, Jeff Bezos quit his job at a hedge fund in New York and moved to the Seattle suburbs. There, he rented a house and started Amazon in his garage.

A year later, Amazon's site launched, and within one month, the company had sold books to people in all 50 U.S. states.

"In those days [in 1995], when I started the company back in that time, we were still a pretty small company by most standards, but we were growing fast, and it was very exciting," Bezos said at the Bush Center's Forum on Leadership in April 2018.

Despite that growth, there was room for improvement, Bezos said.

"We were so inefficient with our operations and logistics in those early days when there were just 10 of us."

One of those inefficiencies was their method of packing orders.

During the first month of launching Amazon, Bezos and his employees would pack orders on their hands and knees on cement floors, when one of his 10 employees had an idea that ultimately "doubled" their productivity.

"I didn't have packing tables," he said at the 2018 Forum. "I said to one of the software engineers who was packing alongside me, 'You know what we should do? We should get knee pads.' And he looked at me like I was the dumbest guy he had ever seen in his life, and he said 'Jeff, we should get packing tables.'"

Bezos, during a September 2018 episode of "The David Rubenstein Show: Peer-to-Peer Conversations," said getting packing tables was "the most brilliant idea" he had ever heard.

And the next day, as a result, Bezos said he bought packing tables and it "doubled [their] productivity."

In 1997, Amazon went public, and the company's employee base grew to 614, according to the company's letter to shareholders. Today, Amazon reports having 750,000 full time employees (as of September 2019) and has a market capitalization of more than $946 billion.

Throughout Amazon's history, there have been several notable times Bezos listened to his employees, even when their ideas seemed to be a bit "scary."

Before the creation of Amazon Prime, Bezos and his employees were attempting to brainstorm a variation of a loyalty program, when a "kind of a junior software engineer came up with this idea, not as a loyalty program, but this idea that we could offer people kind of an all-you-can-eat buffet of fast, free shipping," he recalled in 2018.

"The finance team went and modeled that idea, and the results were horrifying that we would offer unlimited shipping," he said. "Shipping is expensive," even though customers love it, he said.

After launching the endless free shipping, expenses were high, but it all worked out well in the end.

"All kinds of customers were coming, and they appreciated that service," Bezos said, saying the junior engineer's idea was "what led to Prime."

Like this story? Subscribe to CNBC Make It on YouTube!

Don't miss:

How much a $1,000 investment in Amazon 10 years ago would be worth now
How much a $1,000 investment in Amazon 10 years ago would be worth now