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Technology Stocks : Gateway (GTW)
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To: Ramsey Su who wrote (6065)7/8/1998 1:39:00 PM
From: IceShark  Read Replies (1) of 8002
 
Ramsey, I agree. I think the country store hybrid model has a great chance of not working out. GTW hasn't tweaked the major bugs and inefficiency out of their direct model, what makes them think they can run the stores efficiently?

Sounds like you haven't read up on what these country stores do. From what I've seen, they are merely showrooms where you can try out samples and if you decide to buy, GTW then builds one in the standard fashion and ships it to your door. You don't walk out of the store with a box.

So, the only margin issue is selling expense. Will these stores generate enough additional sales, at an acceptable operating cost, as compared to their traditional mode of operation? You can toss the permutations around all day, i.e. will the stores cannibalize sales they would have gotten anyway or will they skim off sales that were destined to go to DELL or CPU?

Time will tell, but I'm not sure we will ever be able to figure it out since they are at the same time cooking up new marketing schemes like Your Ware.

Regards, DWW
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