Joe,
You comment about AMZN, Because they get paid within 30 days by the credit card companies and don't pay their suppliers for 60 days or whatever Amazon, has, supposedly a net 30-33 days to keep the customers cash
You mention a Ponzi scheme. Not exactly. Ponzi paid back his early investors with money from those who invested later until the pot was full of money, then left town. AMZN is just living off the float. For years, brokerages sent people on the west coast checks from banks on the east coast and vice versa to keep the money a few days longer. American Express has encouraged people to keep traveler's check "for emergencies," which lets them make something off that money. Finally, e-brokers make a substantial part of their income selling order flow, so substantial a part that, combined with matching up buy/sell orders of their own customers and pocketing the spread, it is theoretically possible for an online broker to charge zero commission.
Dynamics like this are reshaping a lot of businesses and make obvious models somewhat deceptive.
BTW, brick and mortar seem to me the last place AMZN should go. The inventory costs of a few electrons on a server are much lower than stacking a book on a shelf.
Best,
--Steve |
