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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST

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To: Bill Harmond who wrote (10784)5/10/1998 4:41:00 PM
From: Glenn D. Rudolph  Read Replies (1) of 27307
 

While most consider B&N a more solid investment because of its "reasonable" valuation
and leading chain of real bookstores, it became clear to me just how handicapped B&N is
compared with Amazon. I didn't know that B&N takes its inventory on consignment
(resulting in extra cost per book), or pays publishers extra for display book jackets and
other promotional goodies. I didn't know that B&N's inventory turns are only 1/4
Amazon's turns.


William,

Most retailers take merchandise on consignment. Not all their merchandise but some. The advantage is the consumer can take the merchandise home with them. It is an incentive to buy now. One cannot do that at Amazon. They do not have the store nor the inventory to take home.

The difference in inventory turn is due to the fact BKS carries a lot more inventory for immediate delivery. BKS has a choice. They could stop carrying inventory and sell only on the net but they would then lose money as does AMZN. Lots of hype out there about these internet stocks that never turn a profit from people who have never run a retail company in their lives.

Glenn
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