CNNFN just had someone saying that AMZN's total revenue for 1998 something like $40 million, but its market cap is bigger than Sears, with revenue of something like $40 billion. Go figure.
I used to be in publishing biz, at the time it was standard for a retailer to pay the publisher 60% of sales price, but there is a lot of room in that for discounting, either way, actually. Assuming you have a good title, which is, of course, a big "if." A lot of publishers sell on spec, the retailer doesn't pay unless someone actually buys it, and sends back the remainders for a credit. The authors don't get paid unless the product sells, when you hear about big advances to big names, they are just that, advances on future sales. So, you can have a big presence as a book retailer without a lot of capital investment in books. What kills you is the fixed overhead, the bricks and boards, the utilities, the property taxes, and so on. I can see how you could do very, very well indeed if you didn't have such fixed costs. BUT, but, but - - I don't see how AMZN can do well enough to justify cost of stock. It should be a nice little business, though, and it does seem well run. I am told, thought I never have ordered anything online myself, that the Amazon.com site is much better run than its competitors.
I am old-fashioned, I do like to handle the merchandise before I buy, but maybe someday I will use AMZN or its competitors to buy things that my local Borders doesn't carry. Harris' "Principles of Internal Medicine" comes to mind. When I do, I will use the shopbot. |
