Amazon.com, Inc. (AMZN) Message Board

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

AMZN 234.21

+0.4%

3:33 PM EST

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To: Bill Harmond who wrote (144979)	8/7/2002 10:23:33 PM
From: Glenn D. Rudolph	Read Replies (2) of 164684

">>It is whether the one quarter per year when Amazon can actually be expected to turn a real profit is enough to service debts and provide a decent return to shareholders over the long run." That's a big improvement over your "Amazon is toast" stance of a couple years ago." Bill, You have my comments confused with that of others. I have never used the words toast or described a business in that fashion. Rather, I did state that Amazon did not have a viable business plan and I still believe Amazon does not have a viable business plan. This makes failure the end result. Amazon is stil lacking expertise in retailing as I always stated and they have never really addressed the issue. Trying to increase revenue by providing free shipping is the incorrect approach in my opinion. The buyer wants service, selection and quality. Price is secondary and convenience is primary here. Amazon is losing a lot of revenue for the same sale when they do not charge shipping. The fees to ship items have gone this year. We raised our on-line fees from $6.00 for UPS ground in the Continental US to $7.00 and USPS Priority from $7.00 to $8.00 last January. Our on-line sales continue to grow and at an average of 70 packages daily during the non season, that is an additional $70.00/day that goes to the bottom line. If we gave away shipping, that would be a loss of revenue of $490.00 a day which is a loss on the bottom line. The better solution is to have a fixed shipping fee. Not a fee that increases with the number of items. This will encourage adding to the sale as well since it does not add to the customer's shipping fee and reduces the fee per unit purchased. No matter what, one shipping fee is received as revenue. Think of those millions of lost shipping fees of let's say $6.00 each.

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