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

AMZN 249.43

-1.8%

Nov 4 3:59 PM EST

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To: swimmygoof who wrote (112890)	12/18/2000 11:18:12 AM
From: Glenn D. Rudolph	Read Replies (4) of 164684

I'm sorry I can't seem to find it. It was in some analyst report several months ago. The terms of the deal were that Amazon would handle all fulfillment (recognizing revenue/expenses for shipping) and ToysRUs would pay them 5% of revenue (est. $250 million...5% of which is $12.5 million) plus a fixed fee, which I would guess is about $10 million. Figuring that fulfillment is near breakeven, that's $22.5 million of profit for the segment. I follow this firm now totally out of curiosity and my desire to see it fold. Following it willnot make it fold<G> I must have missed that comment but I do not miss many on this firm. I do not believe this will add to the bottom line. I believe Amazon's cut will be less than their page management cots and fulfillment costs. It is a good deal for Toys R Us though at this point. Toys R Us largest regular competitor is Wal-mart. Wal-mart continues to take market share from the tradtional store. The toys segment was a big loser last year. This year it is a big contributor. The extreme losses last year were due to poor inventory management. Granted that will be an issue this year. I still believe Amazon will lose money there too but we will not see a break down. Do you believe Amazon will be able to raise more cash. The "hogwash" comment from Bezos about need cash is "hogwash" in my opinion. I calculate they are totally out but the end of Q3 of 2001 but they are going to need to raise money prior to the last minute. If Amazon does fail, I believe that will be close to proof that a pure play e-commerce retailer cannot survive. Ebay is not a retailer so I am referring to product fuflillment issues. Glenn

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