re www.buy.com
Mohan,
I understand that the buy.com concept is to sell at or below cost in order to increase market share. They are willing to incur a current loss, to some (?) extent offset by advertising revenues, in order to develop a brand name and following. As you pointed out, there are substantive weaknesses in the concept for the long-term. However, I notice that their product lines include books, cd's, computers and peripherals, software, etc.
buy.com
What do you envision the short-term (the extent of time they are willing to incur this loss without going into Chapter proceedings) impact on the other on-line retail outlets (Amazon, CDnow, gigabuys.com, etc.) to be?
To what extent may this depress margins and/or sales? And at the point where they are forced to move their prices up to an at-or-above-cost level to avoid bankruptcy, how do you foresee the long-term impact on other internet retail corporations? I am not concerned about their potential impact on DELL's core computer operations, as I don't see how they can possibly become as efficient or develop the quality or support system that DELL has. I DO have concerns about competition in the peripherals and software area where they offer direct competition with gigabuys.
Thanks, 3. |
