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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 229.10-1.4%3:59 PM EST
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To: Rob S. who wrote (53565)4/28/1999 8:32:00 PM
From: Greater Fool  Read Replies (2) of 164684
 
>>That works against the theory that there is great economy in numbers.

There are economies of scale and diseconomies of scale. As long as the economies increase faster than the diseconomies, you have incentive to grow. The only economies of scale I see in Amazon are the ability to buy direct from the manufacturers at lower cost, and becoming a catch-all web shopping site (i.e. branding and customer switching cost). These are iffy at best. On the other hand, the diseconomies of scale (increasing management and overhead as a percent of total spending) are very real, and Bezos alluded to them with his comment about expanding the management ranks.

For the near term, though, this all doesn't matter.
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