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Sun, I agree in part with the MF article on the net. Here is what I think will happen.
Commodity like products will continue to fight a battle based strictly on price. When building my computer recently, I used Shopper.com and Pricewatch. Sort in order of price, and order your goodies. Price is the end-all be-all...this model is great for the consumer, but NONE of the e-commerce sites will ever be able to support their valuations on earnings...it just isn't possible.
Next, the hottest e-commerce site, Amazon.com, could be waxed in a heartbeat. How? A combination of two things 1) Borders, B & N, and others only have to discount their products by 10% to get competitive. Many stores do this already, but require the purchase of a discount card for 10 bucks. That "discount card" thing will crash and burn soon, and it'll be 10% across the board. 2) the government will require the e-sites to collect state sales tax. Here in New York, that eliminates the 8% tax spread between on-line and in-store. Lastly, you get to tack on shipping charges for on-line orders. Take a $100 order for books. Buy it at Amazon for $80 + $6 shipping. Go to a local BKS and pay $108 with tax. A $22 difference is pretty large. Under the new plan which ALL book retailers will soon follow IMHO, and the tax changes that are a certainty(IMHO)and the difference becomes: Amazon 80+6+7=$93, in-store $90+7=$97. I would personally rather browse through a real book store and take immediate purchase for the measly $4 premium.
Now that you know how negative I am on the net from a long-term e-profitability standpoint, you should know that I broke my own "code" and started a position in YHOO...
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(thank God again for HOT and EIDSY.....) |
