Consumer 1; Best Buy, CompUSA, Circuit City, et al 0?;
Onsale To Sell PCs At Cost, Make Money On Ads
NEW YORK (Reuters) - Internet retailer Onsale Inc. on Tuesday opened another front in the computer price war, unveiling a plan to sell computers and accessories at wholesale cost plus a modest fee by connecting consumers to distributors and foregoing traditional price mark-ups.
In announcing the service, dubbed atCost, Onsale also said it expected to post a fourth-quarter loss in line with Wall Street earnings expectations, but profit margins would slip into the high-single digits for the foreseeable future.
The success of Onsale's kamikaze-like business tactics -- made feasible only through the advent of the vast electronic reach of the Web -- will depend on the company turning a profit through advertising and a token $10 fee per purchase.
To prosper, the company must rapidly build its name as one of the Web's premiere low-cost destinations for computers. The Menlo Park, Calif.-based company currently is known for its auctions of off-price computer equipment, a separate business.
''This novel approach to retailing is the inevitable next step for commerce on the Internet,'' Onsale CEO Jerry Kaplan said in a statement, noting how Onsale was, in effect, bringing the concept of 'collective bargaining' to the Web..."
source: © Tuesday January 19, 1999 8:04 PM ET dailynews.yahoo.com
...it appears we have reached 'the inevitable next step for commerce on the Internet' in re: Computers, N64's?, PlayStations?, TV's, Camcorder's, ...and the implications to retail outlets Best Buy, CompUSA, Circuit City, Future Shop, Toys r' Us, ...et al could simply be significant and material to the bottomline going forward... |
