Shipping Moguls Who Give Jeff Bezos a Run for His Money
Jeff Bezos has homes in New York City, Beverly Hills, Seattle, and other cities across the country, but when he isn’t splitting his time between one of those estates, he lives in the headlines of almost every major news outlet in America. A week rarely goes by when you can’t find Bezos’ face on the cover of some publication or another, whether it has to do with changes at Amazon or a profile on how he’s now rich enough to buy up the rest of the solar system. It’s easy to look at all the prime coverage he gets and envision him as a man unlike any the world has ever seen before, but in reality, Bezos is just the latest entrepreneur to realize there are fortunes to be made moving things from point A to point B.
Neither Amazon nor any of Bezos’ other companies are couriers or delivery services in the traditional sense, but it’s impossible to ignore the impact of logistics on his enormous success. Free shipping and two-day guaranteed delivery, for example, have become industry standards for retailers since Amazon Prime launched in 2005; after all, people like getting stuff, and they don’t like waiting for it. Even before the reign of “The Everything Store,” tycoons rose to extraordinary wealth and power by pioneering their own ways of moving goods cheaper, faster, or at immense scale.
Cornelius Vanderbilt
How do you become one of the richest people in the history of the world? If shipping magnate Cornelius Vanderbilt is any example—and, as one of the five richest Americans ever, he is—then you just need to diversify your holdings and ruthlessly destroy the competition. Born on Staten Island in 1794, Vanderbilt started his own ferry service linking his hometown with Manhattan at the tender age of 16, and it lives on today as the iconic Staten Island Ferry. Vanderbilt’s rivals referred to him “The Commodore” to poke fun at what they considered his youthful naivete, but the budding entrepreneur managed to grow his business and expand into new ferry and steamboat routes. He eventually established oceangoing shipping lines to profit off the flood of settlers heading to California during the 1849 Gold Rush.
Many of Vanderbilt’s ferries linked up with railroads once they reached port, and over time, Vanderbilt realized the potential in trains and began to buy up an interest in rail companies. In 1869, as the nation’s largest railroad operator, Vanderbilt merged his lines into the New York Central and Hudson River Railroad, spanning from the East Coast to Chicago. Vanderbilt was considered a dangerous man to cross as he repeatedly drove competitors out of business or used lawsuits to get his way. When he died in 1877 at the age of 82, his net worth was an unfathomable $105 million.
Henry Wells and William Fargo
I know, I know, this is two people. But they were a big deal! William Fargo and Henry Wells began their relationship as competitors in the “express mail” or premium delivery business. They decided that they would be better partners than rivals, so in 1850, along with a third partner, Wells and Fargo started a new firm called… American Express (you thought I was going to say Wells Fargo, didn’t you?). This humble company would evolve into the major credit card of today, and it’s remarkable to think these men founded two financial institutions that survived for over a century, like a Paypal Mafia for the Old West.
When Wells and Fargo couldn’t convince their board to expand American Express’ courier and financial operations into the growing California market, they decided to go their own way and start another company, and so Wells Fargo was born in 1852. As one of the only companies to survive the Panic of 1855, Wells Fargo faced virtually no competition in the express mail and banking industries, and it soon launched a stagecoach line that would become its signature. Wells Fargo bought out several competitors, including the mythic Pony Express, and by 1866, the company controlled an unbroken overland mail route stretching from the Missouri River (then the edge of the civilized world) across America’s untamed frontier to the growing West Coast. These stagecoach lines helped shave the time it took to send mail or packages across America from four months to less than two weeks, enabling a rush of commerce from sea to shining sea.
Richard Warren Sears
Americans today need only reach into their pockets and tap a few buttons on their phone if they want to purchase anything from Christmas gifts to toilet paper and have it sent right to their doorstep. The luxury of Amazon wasn’t available at the turn of the 20th century, however, but what may be its closest historical parallel did offer a spectacular range of consumer goods for home delivery: Sears, Roebuck and Co. The businessman who got top billing in the company’s name was none other than one Richard Warren Sears of Minnesota. Sears worked as a railroad station agent in his 20s, and when his boss refused delivery on a certain shipment of watches, thinking they were bait for a scam, the young man bought them himself and sold them at a profit. In fact, Sears was so impressed with his business instincts that he started a company selling watches and jewelry via catalog.
Sears sold his fledgling business in 1889 for the hefty sum of $100,000—close to $3 million in today’s value—when he was just 26. He dove back into the mail order business in 1892 with the single former employee of his watch company, Alvah C. Roebuck, as his partner. The new Sears, Roebuck, and Co. revolutionized countless rural Americans’ shopping experience; farmers and others on the frontier typically relied on credit to order goods via general stores and had to negotiate their own prices, whereas the Sears catalog offered a greater range of products at standardized, clearly-defined rates. For some light reading, shoppers in 1895 could pursue the 532-page catalog that hawked everything from cars to stoves to groceries to prefabricated, unassembled houses. The company evolved into a major retailer that’s now crumbling, thanks in no small part to digital disruption as Amazon has taken Sears’ original business model and brought it into the 21st century—the young truly do eat the old.