Marketing costs. And despite all this competition, Outpost.Com has grown to over 150 million in sales. Why? They have also captured 400,000 customers. Why? They have also generated about $400 per customer. Why?
I heard your same arguments when CC and BBY were just beginning. Look at them now.
Growing markets are by nature and definition competitive. Talk
about increased competition, and the argument thereof to support a
bear on COOL is not compelling imo.
A telling sign of a growth market, is the attraction of competition.
The investor then must make a choice of what company is best
positioned to exploit this growing market.
COOL is definitely one of the bright rising companies in this arena.
A new dynamic upon us. You must not forget how
Etailing reduces costs throughout the entire marketplace.
Just a few benefits of etailing, which are forgotten by the
naysayers:
No inventory shrinkage. (shop lifting)
No high turn over retail sales people. (high costs)
No or minimal weather impact. (snow keeps the shoppers at home)
No real estate costs.
No retail fixture costs.
No retail remodeling costs.
24 hours operations.
Excellent cash flow ratios with a/p and a/r.
No sales taxes.
Easier and less expensive record keeping. (reduced accounting
costs due to no multi-state regulations)
I will also add, that as COOL grows revenues, its cost prices and
payment terms with vendors will improve dramatically. Do you
really think COOL is buying at the best volume pricing yet?
Yes, things look extremely bright for this sector. To say otherwise
is ignorant IMO. Yes, the debate can be on which companies will
prosper, but not on if companies will prosper. They will. And
COOL is positioned very well to do so, in a very very large market.
To post a bear argument that there is no room for a young dynamic company to prosper in a growing market seems weak. You may decide not to invest in COOL for your reasons, but to short COOL on these, imo, is extremely dangerous. I see COOL making it, as a company and as a great investment.
Keep in mind, I only have about 3% of my holdings with COOL. I say this for perspective, and I always advise diversity in one's holdings.
But the reward/risk ratio now with COOL, really favors the reward IMO.
For traders who must short stocks, there are plenty of other enticing targets. (British Airways for one.)
Good Trading, LF |
