Don:
While Internet stocks are extremely volatile and some appear to be much better values than others, I would be very careful with OnSale.
A lot has changed in the past year with regard to the outlook for OnSale. The biggest (and most important) factor is the intense competition that was not present a year ago.
Let's not forget that a large percentage of those who buy from places like OnSale are savvy people looking for the best price. With that in mind, you now have many new alternatives to OnSale.
Besides the classic mail-order houses (like PC Connection, Microwarehouse, PC Zone, PC Mall, etc), you now have several of these mail-order houses offering close-out, refurbished, surplus deals and auctions. You have Cyberian Outpost, Surplus Auction, etc.
And, of course, you have eBay.
Now, many of the sites are offering up Best Price searches, where you type in the name of the product you are looking for, and robots go and and find the companies offering the best prices. CNET is already doing this as a result of their ComputerESP purchase, and I think Infoseek just purchased Quando for that purpose.
During 1997, I bought more than $10,000 worth of computer merchandise from OnSale. During 1998, I have bought $0 from OnSale and shifted that to sites such as the ones mentioned above, while still spending about $10,000 worth.
And who knows what kind of new competition we may see from the likes of AOL, Yahoo, Microsoft and many others.
I don't think OnSale is going away, but I don't think there is anything special about their model. |
