Amazon.com, Inc. (AMZN) Message Board

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

AMZN 233.23

+1.8%

12:59 PM EST

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To: Alomex who wrote (151059)	12/28/2002 2:54:00 PM
From: GraceZ	Read Replies (1) of 164684

Question is, why would a retailer list its wares right next to the competitors so people can compare prices and pay Amazon sales commission in the process? I think you are looking at this as a commission when actually what the traditional retailer is paying AMZN is a fee that is lower than the cost of putting their own site up and operating it. They are being driven to AMZN because AMZN can use it's expertise and scale to lower the operating cost of an online store. Because the fee is lower, the retailer can offer more competitive prices, not less competitive ones. Plus, even if Amazon came to dominate this sector of the market all they would be doing is taking a percentage of the profits from already established retailers, with cutthroat margins. Online retail is growing at what a 30% yearly rate and traditional retailing is growing at what rate? The traditional retailers don't have a choice about offering their wares online. All retail operations are heavily dependent on growth and online is the only area that is consistently growing, stop growing or even slow the rate of growth significantly and you die a slow KM like death.

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