Amazon’s Message for the POS Channel

By: Jim Roddy, VP of Marketing at the RSPA

Because my father worked one year for a public company in the 80s and received shares of company stock, the annual report showed up in our mailbox every year. The report was glossy and colorful but, especially from a kid’s perspective, it was so boring my eyes were closed before I thumbed through to the last page. The CEO’s letter to shareholders was especially dry and filled with PR-speak.

Fast forward 35 years to 2019 when I read Amazon founder and CEO Jeff Bezos’ most recent letter to his company’s shareholders. Instead of falling asleep, I sat up straight. My eyes opened wider. My mouth might have been agape as well. Amazon’s shareholders were Bezos’ target audience, but it seemed he was also sending a message to the POS channel.

Below are excerpts from the letter along with my comments and questions tying Bezos’ thoughts to our industry. I hope this can help serve as a wake-up call to POS companies who are standing still when they should be moving, walking when they should be running, and stagnating when they should be innovating.

We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build. There are many such tools … and we’re inventing more every year.

How many tools have you invented for your customers over the past 12 months? How many are you working on rolling out over the next 12 months? When I say “invent,” I don’t expect SMB solution providers to have a fully staffed R&D lab. I’m asking if you’re collaborating with new vendors, strategizing with your distributors, adding new products and services, and creating new bundles to serve your merchants better.

We invested in both of these programs at significant financial risk and after much internal debate. We had to continue investing significantly over time as we experimented with different ideas and iterations. We could not foresee with certainty what those programs would eventually look like, let alone whether they would succeed, but they were pushed forward with intuition and heart, and nourished with optimism.

What are you talking about inside your organization? Are you focusing only on putting out fires or are you debating, experimenting, iterating, and investing in your future? To take the first step forward, you don’t have to know with certainty where steps two through infinity will take you. As President Franklin Roosevelt said, “Above all, try something.”

From very early on in Amazon’s life, we knew we wanted to create a culture of builders – people who are curious, explorers. They like to invent. Even when they’re experts, they are “fresh” with a beginner’s mind. They see the way we do things as just the way we do things now.

Would you describe your staff that way: “curious explorers in a culture of builders”? Or are they “set in their ways”? During your pre-employment interviews, do you ask candidates about their past innovations and do you dig to understand if they have entrepreneurial spirit? Those talents and abilities may already exist on your staff but they might be latent. Talk one-on-one with staff members to understand their curiosity and their ability to innovate. Nurture those skills through regularly scheduled challenging conversations, and then test ideas that have a chance to succeed.

Wandering in business is not efficient … but it’s also not random. It’s guided – by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there.

At the IT publishing company where I was president for 11 years, our operations employees and managers (and me) took pride in building systems that enabled us to maximize efficiency and deliver products “on time every time.” But when we launched new initiatives, I would have frequent conversations with those staff members about “degrees of messiness” while we developed an understanding of the best practices. If you’re in the POS industry and you’re not experimenting with new solutions for your customers – or “wandering” as Bezos calls it – you’re probably running a very clean and predictable business … that’s losing relevance each quarter.

Much of what we build at AWS (Amazon Web Services) is based on listening to customers. It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly (speed matters in business!).

Successful POS solution providers are uncommonly close to their customers. They engage them through QBRs (Quarterly Business Reviews) or some other form of sit-down meetings to discuss the merchant’s future and how the solution provider can adapt to meet their needs. The best POS VARs are viewed by customers as an extension of their business, not just another vendor.

No business could thrive without that kind of customer obsession. But it’s also not enough. The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.

This is why it’s important for everyone in the POS industry to engage with the RSPA (Retail Solutions Providers Association) and attend industry events like RetailNOW and user conferences hosted by their distributors, vendors, and ISVs. Understand what’s around the corner from a technology standpoint and propose those solutions to your merchants before they ask for them. (And before your competition offers it to them.)

No one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it. We had a hunch, followed our curiosity, took the necessary financial risks, and began building – reworking, experimenting, and iterating countless times as we proceeded.

Repeated for emphasis: To take the next step forward, you don’t have to know where steps two through infinity will take you. But you must take step number one in order to move anywhere.

As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.

How many new solution failures have you experienced over the past 12 months? How many new solutions are you planning to test over the next 12 months? If your answers to those questions are “zero” and “zero,” guess how much you’ll move the innovation needle this year? (Hint: It’s a whole number less than one.)

Skeptical POS executives might be thinking they can’t emulate the approach of a company like Amazon with their seemingly infinite resources. It’s true you can’t match their scale and cash-on-hand, but you do have special resources you can maximize. You have vertical experience, access to your unique set of customers, a network of industry experts you can call on (through relationships built at trade shows, through distributors, vendors, etc.), a knowledgeable staff, and more.

Your task as a business leader is to marshal those resources to ensure they take care of customers and innovate for the future. Start imagining your company’s future today.

Special thanks to Cervion Systems CEO and RSPA Chairman of the Board Hunter Allen for forwarding me Bezos’ letter to his shareholders.


Jim Roddy is the Vice President of Marketing for the Retail Solutions Providers Association (RSPA). He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim is regularly requested to speak at industry conferences and he is author of Hire Like You Just Beat Cancer. For more information, contact JRoddy@GoRSPA.org.