Cool's added value...A response I gave on another board....
The following was my response to a "middleman argument" against COOL. I'd like to add it this board.
One stop shopping. That's why Walmart has succeeded, and that's why Staples WAS very successful.
Also, manufacturers cannot garnish 100% distribution, so two things will happen. 1) manufacturers will not undercut its distribution line. 2)multi-distribution points will continue.
The above is broad brush, as of course there will be some exceptions.
But on the whole, consumers will still want to shop. That is compare model to model, manufacturer to manufacturer, service to service, etc. A manufacturer cannot provide this in your premise/model.
You must also consider the size of the market. This market is expected to reach 1 TRILLION dollars in three years.
Distribution is the key. New manufacturers need great distribution. As the first and strongest Etailers achieve this, (as COOL is obviously doing), you'll see new products and services first through these new channels of distribution.
I understand you concern regarding middlemen, but one must remember, that consumers want to shop. Yes, there will be more direct options. But consumer spending represents over 2/3's of our GNP. This is a huge market. Like the superstore trend in the 80's there were many doubters.
COOL offers a consumer to log on and shop. One bill, one ship from point, one stop, one customer service, all at great prices.
COOL offers value.
Is retailing, all forms, competitive? Absolutely. Can investors though make money with retailers? Absolutely. Look at the runs made past with BBY, CPU,WMT, KM, SLPS. OMX, CC, etc.,
This direct argument has been used in many different scenarios. One I
remember is when INTEL tried to enter the PC business direct. Why did they need boxmakers? Its called choice and added value. We agree here. I too asked myself the added value question about COOL. The answer is COOL offers a consumer to log on and shop. One bill, one ship from point, one stop, one customer service, great choices, multi-product lines and catergories, etc., and all at great prices.
COOL offers value.
I will also add, that one must also look at the condition of the market. Currently there is interest in etailers, with very short supply of stock. Even if my rationale is flawed, (which I highly doubt-g-), the likelihood of stock appreciation far out weighs a stock depreciation. Too much good news is on the immediate horizon.
Good Trading, LF |
