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

AMZN 227.35

+0.3%

Dec 19 9:30 AM EST

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To: Jenne who wrote (63444)	6/20/1999 1:07:00 PM
From: H James Morris	Read Replies (1) of 164684

Wow!! With another strong buy, and this business week clip, I wonder who will be the last Amzn bear to surrender. Kis or I?? >>Q: How are the fundamental measures of business value being challenged? A: Look at bookselling. Once you've got a bookstore, the way to make more money when you're starting out is to try to operate the store at full capacity -- pack in as much selection and as many customers as you can fit. But after you've achieved capacity, the only way to increase business is by boosting margins. On the Internet, there is no limit on the capacity of the store, or the number of customers who can come in. Therefore, percentage margins really aren't important. What's important online is the total dollars you can bring in divided by the total amount of capital required to get those customers. I calculated that Amazon could equal the return on investment capital that a bricks-and-mortar bookseller achieved if Amazon had only 5% gross margins, vs. 30% for a traditional retailer. It's so different because of the scale available to stores online.<<

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