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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 217.21-2.5%3:59 PM EST
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To: Glenn D. Rudolph who wrote (64788)6/27/1999 1:02:00 PM
From: Lizzie Tudor  Read Replies (2) of 164684
 
Glenn, it just happens I am reading a book on Buffett right now and one of the things he looks for in management is "candor". Sure would be nice if we had some candor here from Bezos, then we would know whats going on! Of course the other side is they don't want the competition to copy their biz model, so there you go.

My take on what amazon is doing .... (a guess).... they will separate their products into heavy goods and other. Heavy goods are appliances and high $$ value... furniture, electronics etc. Other are cheap things like books and toys. Books and toys get one warehouse in one part of the country and whatever you order comes from there. This is the most efficient system for inventory. Heavy goods also go to one warehouse but it is the regional warehouse closest to their manufacturing facility. So say, all maytag appliances on east coast somewhere, Whirlpool tennessee or whatever. This approach will save them from moving Whirlpool to Nevada for shipping and then back to Tennessee if a customer orders one.

When the customer orders it, the product gets shipped directly from there which is expensive but that cost is already being absorbed in the logistics model for appliances today. What amazon is saving is shortage and multi-hop from warehouse #1 to warehouse #2 and then transfer to some other warehouse because a customer wants it and it is out of stock. OK, that is my guess as to how to attack the heavy goods.... if thats what they are doing of course!
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