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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 249.14+0.3%Nov 11 3:59 PM EST
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To: Glenn D. Rudolph who wrote (118907)3/1/2001 10:06:55 AM
From: microhoogle!  Read Replies (2) of 164684
 
Attrition is pretty common in pure etailers. However, Amazon.com commands more loyalty than any others, so I do expect that it will always have a critical base of users (let us say 17 million users) who should be a rich target for marketing. Keep in mind that catalog sales in itself is a huge market and I do expect pure etail (only the likes of Amazon) to stay. 3.5 Billion is a chump change to buy out Amazon by Walmart (or any other store).

I see the following advantages for Walmart

1. Etailing Technology perfected by Amazon (walmart.com is not good)
2. Additional marketing channel for Walmart. Lots of potential for cross sells and up sells.
3. New customer base (walmart buyers typically do not go to Amazon.com and vice versa)
4. Returns for goods purchased online is easier, so customer satisfaction should remain high.
5. Raises barriers for entry to other big chains and making it difficult for others to compete.
6. I would raise the cost of goods sold online, just enough to make it profitable. This may cause attrition but there are many people who are willing to pay for better service.

and many more... (I am getting lazier now)

While I may agree with many other people that their way of conducting business at present may not be stellar, but it is not a company going in oblivion either. I will put my money where my mouth is. Begining today, I will start buying Amazon in small bits and pieces (Don't worry, I will stay diversified) and I will concede defeat, if I am wrong. The upside target for me will be $20 and if I see deterioration, I will reconsider my upside target.

PS: Walmart.com is cutting it's workforce by 10% of its paltry 250 employees. This is a business that amazon is good at. They just need to figure out how to sell at 1.05 for a cost price of 1.00.
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