Co,
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.
Many of the problems with Amazon's business model (such as low cost of entry for competition) have been discussed before. However I think the whole market for books over the Internet is limited. Bookstores have always been special places to shop. Where else can you take a product off the shelf and use it undisturbed while deciding to make a purchase? The big retailers recognize this and have made their establishments attractive with large selections and extras such as coffee bars. Amazon cannot match this experience. And book prices are not that high in the first place for buyers to only purchase by price. Ultimately I think this will cap the market for Internet book shopping at lower levels than comparable online retailing. Buying Amazon you are betting that they can become an online Target or Walmart because books aren't going to do it.
IMO,
Dave |
