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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 217.15-2.5%Nov 20 3:59 PM EST
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To: John May who wrote (162)9/1/1997 4:52:00 PM
From: Bilow   of 164684
 
A difference is that computers decrease in value quickly as they
become obsolete. Books do not. Consequently, there is not the
same impetus to minimizing inventory. And don't suggest that the
cost of holding non-moving inventory is significant. Interest rates
are low, and volume buying gets volume cost reductions. I believe
the primary cause of losses among electronics and computer
companies is having to write down the value of inventories. Books
are a (comparative) no-brainer. Just buy them cheap, sell them for
a profit, and keep your merchandise turning over. Books are a
commodity, and the knowledge of how to make money retailing
commodities is ancient. (Watch your margins. And try to add value
that people will pay extra for. But Amazon's margins are declining.
If the net is such a great way to sell books, how come they are
losing so much money doing it?)

BKS's stores still seem to be stuffed with customers. Up here in
Seattle, they are open till midnight, and loaded with espresso
drinking yuppies, pretending to read and flirting with one another.
Amazon is growing quickly, but I think it is still has only a fraction
of the total sales that BKS does. Could somebody who cares look
up the most recent quarter's sales for the two companies?

-- Carl
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