Amazon Rising

Costco's Jim Sinegal explains retail warfare

Keeping a respectful, wary eye on Amazon
VIDEO2:5702:57
Keeping a respectful, wary eye on Amazon

In 2008, Costco founder Jim Sinegal bought a Kindle from Amazon with a defective screen. He was so impressed when the company immediately replaced it that he wrote to Amazon CEO Jeff Bezos to comment on the seamless customer service. He got a message in return from the man himself.

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"I want you to consider me to be your personal customer service representative," Bezos said.

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Sinegal is an open admirer of Amazon's customer-centric service ethic, and he has good things to say about the CEO's commitment to a long-range business perspective. But all's fair in love and retail, and the Costco founder said that he regularly shops on Amazon to observe its methods.

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According to Sinegal, Bezos allegedly does the same thing with Costco. He even speculated that Amazon Prime may have been inspired by his company's membership model. But he said that Costco has Amazon beat when it comes to across-the-board low prices, and sooner or later, Amazon shareholders are going to force a change.

"I think what will stop them is if, No. 1, the pressure of becoming profitable becomes so great that they've got to change their game plan," he said. "I think that eventually they have to figure out how to become a little more profitable in their business."

—By CNBC.com staff.

CNBC reports on the spectacular growth of the online giant Amazon. "Amazon Rising" premieres Sunday, June 29, at 9 p.m. ET/PT.