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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 230.27

-0.6%

Dec 11 3:59 PM EST

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To: Lizzie Tudor who wrote (60975)	6/7/1999 7:59:00 AM
From: Glenn D. Rudolph	Read Replies (1) of 164684

But having said that, if you think the WMS is meaningful then maybe pull up the promotional pieces on some wms software and see what kind of cost savings they are promoting (and cut it in half). Unfortunately I don't know wms but 2 companies I think are McHugh and BDM, they are probably on the web. Michelle, We are in an area that is totally foreign to me. I would need to do too much research (particularly learning all this from the beginning) to have the slightest handle on the total picture. My guess is the main distribution man Amazon obtained from Walmart specializes in this area. That would seem like a valid reason for obtaining him even if it did cause possible litigation. I could look up the name again but the name is not that important. The few percentage points that you indicated that may be saved by ERP does not appear to be enough at first glance. As the quarters progress, I will drop the costs in your lap and see what you think both from a ERP or SAP and a WMS point of view. I do believe well healed competition would be willing to spend for top implimentation. Walmart comes to mind as does Bertelmans. We are not discussing the short term movements of Amazon here but I believe what we are adressing very lightly on the surface, is the possibility of success or failure for the firm in total. Amazon will no longer be focused on books, music and videos as stated int heir lousy advertisements. Competition is going to come from all sides as they add product lines but not all the competition from just a few players. Sears is another that will likely spend for top implementation for the products they wish to sell. PlanetRX will. CVS will. As large as Walmart it, they are not the end all of retailing. They are the largest in total dollars but their market is commodity products and low end merchandise. Quality apparel, jewelry, cosmetics, etcv. have not even been addressed as of yet. I am starting to see why the analysts that are vury bullish on Amazon are publishing little detail. I suspect they are having the same problem making a determination as to the cost savings in the long run using top implimentation. They are going with a gut feeling due to execution of management from the past. I was playing with a spreadsheet for Amazon last night more as entertainment and I concluded they need to shave a total of 4% to become profitable in margins with sals of $5 billion per year or less. I have no clue with sales exceeding that. I will enjoy watching it play out. I will come to you with distribution cost questions if you do not mind:-) Glenn

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