Staples (SPLS) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Staples (SPLS)

SPLS 10.25

0.0%

Sep 28 5:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Adelantado who wrote (172)	5/18/2000 9:42:00 AM
From: Jeffrey James	Read Replies (1) of 184

It doesn't cost much to do e-Commerce badly. It takes some serious money to do it well. Software engineers are key to the solution, but not an important cost driver. My guess is the biggest cost driver for Staple is national TV advertising, which doesn't ramp with and must precede on line sales. As a result, customer acquisition cost is high up front. The target customer is the Admin person in a larger work group. They buy high $ orders, which lowers delivery cost per order. Mom and Pop businesses aren't likely to very profitable. Your savings in store costs are eaten up in gasoline. If Staples.com is to work out and become profitable, it needs to retain customers. Repeat buyers have lower acquisition costs. Is the target Admin likely to become a repeat buyer? Staples.com is an ideal channel for them. They can order from their desk. No phones. No holding on line. Next day delivery. It is quick, easy and painless, which makes for a repeat buyer. Unlike Amazon.com and other B to C, price is not the primary purchase motivator. Like Amazon et al, first to market yields a lasting advantage. It is worth some up front losses to gain the hearts and minds of the Admins of the world.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next