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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 226.19-1.8%Dec 12 9:30 AM EST
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To: Bill Harmond who wrote (146568)9/2/2002 4:23:50 PM
From: Glenn D. Rudolph  Read Replies (1) of 164684
 
"So much for low barriers to entry! "

I am not sure you were implying I said that. I was not one of the group making the argument there were low barriers to entry. Rather, my position has always been that the only way to turn a profit selling on-line is by selling at price above that of traditional stores. People will pay for the convenience and it is convenient.

I must have said hundreds of times that Amazon's cost of fulfillment exceeded its gross margins. I am sure you recall me making that statement. The solution is either to increase gross margins or reduce fulfillment costs or a approach it from both sides.

I am only explaining this due to the fact I was/am bearish on the future prospects of Amazon but not always for the same reason as that of many others. By the way, I continue to think over Amazon's decision to basically offer free shipping without coming to a conclusion. I believe I am missing some needed information only Amazon has from their current experience selling on-line. My customers do not seem to have much opposition to paying shipping charges. My average customer is not buying a $20.00 book and a DVD. It is different.

One last comment. Selling my products on-line have very high barriers to entry. Specifically capital requirements.
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