Amazon.com, Inc. (AMZN) Message Board

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

AMZN 238.53

-2.3%

3:34 PM EST

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To: Glenn D. Rudolph who wrote (10827)	7/19/1998 2:49:00 PM
From: Robohogs	Read Replies (1) of 164684

Don't get me wrong - as I have posted in the past (thank the heavens I couldn't get stock to short at $40), I too think this is a losing stock eventually (once it turns profitable in 2000/2001 and people start seeing a PE or when we get the crash of ???? that everyone seems to be predicting). The problem is there has to be a catalyst. With respect to inventory, I would assume AMZN could likely get by by ordering 1000 copies each of the 1000 biggest sellers (i.e., 1 mm books at $12 per book or only $12 million). So they could probably get to a point where they are big enough to stock inventory and do only larger orders. Does anyone know how Barnes and Noble or Borders restock individual stores? Do they have a warehouse somewhere, do they go to distributors or do they go to the publishers? Amazon will have an advantage here since they will only need to stock one or two centers and not hundreds of books and they can only stock the biggest sellers (remember the old 80/20 rule - 80% of sales from 20% of products) and pay more for the lower sellers (which are probably lower cost from publishers and hence distributors anyway given less demand). Don't get me wrong - AMZN is over-valued but for the simple reason that there are resources on the net to find the absolute lowest cost and I would always go to the cheapest for a commodity product. AMZN has to stay an entertainment and IT (full of content such as best-sellers and reviews and unique search tools) to win the game. Will they ever make money? yes Are they worth almost $10 billion? Absolutely not.

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