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

AMZN 230.27

-0.6%

Dec 11 3:59 PM EST

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To: Satellite Mike who wrote (26819)	11/19/1998 2:03:00 PM
From: Glenn D. Rudolph	Read Replies (1) of 164684

BKS just doesn't get it. The only way you can be successfull in this business is to offer more goods than just books. Not only is AMZN selling WAY more books than BKS, they are selling all sorts of other stuff, too. Otherwise you just can't survive on the internet. Satelite, I lately believe addressing fundamentals is fruitless but I am a sucker for a comment:-) I do believe BKS does get it. BKS did not waste millions of dollars advertising to a very small market segment. BKS became serious when the market segment was more mature. I believe that to be a better retailing strategy. Now let's focus. BKS sells software and musch in dsome of their traditional stores.The superstore in my area has all three. BKS is selling books, software online and magazines online. BKS focus presently has been on making strategic alliances such as with Berterlmanns and the buying of Ingrams. One cannot turn a profit selling anything without a good and efficient distribution channel. BKS knows this and is developing this channel. AMZN, on another note is not. The custos of fulfillment alone for AMZN exceeds their gross margins. Unless AMZN can develop an economic method of distribution, it will be impossible to ever turn a profit no matter how large the sales numbers are. You will notice that Walmart, Kmart and many others have now put up e-commerce web sites but most are not advertising them heavily. There may be a profit in e-commerce but it will be slim due to the nature of packages to each household. This method of selling products is inefficient. The only exception I see is content that may be sent via broad bandwidth. The CNBC special last night on e-commerce had the Forrester Research man stating that today you can buy a car on the internet. Of course, you do have to go to the dealer to obtain it. He also stated that by next year one can buy the car directly off the net. I was wondering how the UPS, Postal or Fedex person is going to carry that car from their truck to your door. This may seem off the point but it really does go to the distribution issue. It is a problem that is getting worse. We had a package delivered to our home last night via UPS at 7 PM. They were running behind and this is not even December. In December, they may be forced to turn away deliveries during the last week. The Forrester comment was pure hype and speculation. Most people prefer to test drive a car before actually buying it. If everone buys their car directly on the net, there will be no dealers at which to test drive. He never addressed distribution. I can picture the 18 wheeler truck that carrys cars driving up to each house and delivering one car at a time in various neighborhoods. How efficient would that be? Just rambling thoughts. Glenn

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