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

AMZN 224.25

-3.7%

2:01 PM EST

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To: Clam Clam who wrote (4)	5/14/1997 1:35:00 PM
From: Shege Dambanza	of 164684

Haven't studied the details, but it would seem to me that B&N, by virtue of its size, will be able to get deeper discounts from publishers than Amazon.com. I believe that the top tier booksellers (like B&N, Borders) buy books at 50% of retail; this is what allows them to sell at a discount. Amazon.com probably gets books at ~60% of retail. The question then boils down to this: Will B&N (and others like Borders) be able to combine their superior purchasing power with enough efficiency and service on their Web-based operations to put amazon.com out of business? I think yes, if they set them up as separate business units but allow them to buy from the parent at deep discounts. Amazon had a great idea. It's not clear that they will continue to come up with enough innovations to beat the big boys. P.S. Amazon.com carries little or no inventory. This is very good. On the other hand, B&N can use its website to sell its bookstore stock of unsold and unreturnable titles, at prices amazon.com could not even come close to matching.

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