Amazon.com, Inc. (AMZN) 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.

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

AMZN 239.16

+2.1%

Jan 23 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Glenn D. Rudolph who wrote (134918)	11/18/2001 7:18:06 PM
From: Lizzie Tudor	Read Replies (3) of 164684

*Bill:* The built out their back end too quickly. Glenn: Bill, Maybe it might be safe to say they did not need much of a backend. If they could jettison the DCs without penalty now they would do great. I can tell you from personal experience this fulfillment process is a nuisance. If there were better parties just specializing in the fulfillment, I suspect more firms would ask Amazon to do their front end and the fulfillment would be subcontracted. Hi guys! Glad to see this subject come up.... I know a little about this. I got this story from some KP people last year, so its pretty credible. Initially, the Amazon model was no-inventory - as Glenn suggested. Bezos had seen Dell do it and wanted to apply it to books. That was the bizplan KP funded. They would not have funded a huge brick&mortar buildout which was the original outcome. But when Bezos tried to implement the Dell model it wasn't working for a number of reasons - mostly because the product was much more specialized than a computer (Dell basically sells a few models, if they overorder it will get sold eventually, not so with books). Meanwhile the Amazon storefront was becoming an incredible success beyond their expectations. Bezos wanted to expand into more specialty goods but didn't know how to proceed with the outsourced fulfillment issue. The business was growing too quickly and they couldn't risk the customer satisfaction issues with botched fulfillment so they decided to do it themselves - this at the urging of Joy Covey - BIG MISTAKE! Also (and this is jmo) - Joe Gallo seems to have been absent during this whole mess and this was what he was supposed to help with. Of course its easy to poke holes in the strategy now with all these unused DCs Amazon holds leases to. But I have a friend who assures me that the pressures on management "inside the tornado" are much greater than on a sinking ship. In the end I think Amazon will work it out. They are drop shipping books from the distributors now (thats a no-inventory) and the storefronts they don't inventory. They do take possession of some of their specialty stores. Lizzie

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next