Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: JEFF CHAPMAN who wrote (8795)	5/15/1998 3:38:00 PM
From: BelowTheCrowd	of 18691

The "standard" e-commerce business plan is NOT to actually own any infrastructure or inventory. They expect that their success will lie in being the conduit for orders, and that all orders will actually be shipped by a third-party distribution house. Much of the hope for their success lies in the fact that with minimal physical assets, they can keep the overhead quite low. Of course, this makes barriers to entry quite low as well. ANYBODY can make a deal with the same distributor. It also begs the question of why the distributor shouldn't set up a web-page of their own, and cut out the middleman. The internet is largely about DISintermediation: Direct contact! Interestingly, AMZN's recent debt offering was to support construction of their own physical distribution center. A clear break from their "low overhead" model. It really begs the question of why they think they can beat companies like B+N or Bertelsmann, whose strength is in optimal use of distribution facilities... mg

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