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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: Lizzie Tudor who wrote (69492)7/25/1999 8:07:00 PM
From: Eric Wells  Read Replies (2) of 164684
 
Michelle - thanks for your reply. Isn't Amazon moving to a regional distribution model with the investments they are making in warehouses?

Yes, Wal-Mart will be cannibalizing their own stores - but this is a better option than having the business go to Amazon. Of course Wal-Mart's stores may become costly when customers move to the web - but I believe the transition will be slow. I can also see Wal-Mart shifting the function of their stores to a model where Wal-Mart stores act as local distribution centers - where customers order products from Wal-Mart via the web - and someone from the local store picks the stock and drives it out to deliver to the customer (possibly same day). Isn't this the Webvan model?

As for whether Amazon can list items at lower prices than Wal-Mart - I believe that's an unknown - and I see no reason why Wal-Mart would not be able to match Amazon's prices on the web. If anything, the fact points to the extreme price competition that we are going to see on the web. Also keep in mind that Amazon seems to not want to compete on price - they're focused on offering a high level of customer service and building strong brand.

Anyway - it's definitely an issue for further debate. And we seem to be on opposite sides here. I thank for your time - and I appreciate the points you raise.

Thanks,
-Eric
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