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

AMZN 234.70

-1.2%

Nov 14 3:59 PM EST

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To: Glenn D. Rudolph who wrote (108788)	9/22/2000 3:15:53 PM
From: Bill Harmond	Read Replies (1) of 164684

Amazon has 17 million repeat customers and offers the largest selection of any retailer. Amazon is the leading etailer in every country in which it operates except Germany where it has just opened. It has just built a huge, sophisticated fulfillment infrastructure that displays availability of every SKU in real time on its pages. Those startup costs will now decline as % of sales. Gross margins are improving. Fulfillment costs are decreasing as percent of sales. SKU's are exploding. Since introducing electronics last year Amazon has increased the SKU's in the category by 2.5x, yet decreased inventory on hand by 20%! Inventory turns swamp any bricks and mortar retailer, and has the highest customer satisfaction of any virtual retailer. Where you make your biggest mistake is in normalizing last years financials that included the 15x buildout and the opening of so many category storefronts. Keep in mind, for example, that Amazon wasn't in the toy business officially until late in the year, but was issuing PO's for toy inventory as early as February, yet you pound on them for inventory stumbles.

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