Gene, I'm new to this thread, but after reading the BARRON'S article, could not ignore
it.
Gene,
Welcome to the thread. We always can use new thoughts.
What the article completely and totally neglected, however, were the unique services
offered by AMZN to its customers, including searching, reviews of books and
recordings, lists of items that might interest the customer, based on other customer
interests, extreme care not to overcharge on postage and handling, etc.
This is not true at bn.com? I also noticed your focus was mostly on the core businesses such as books and music. Please keep in mind they can never be profitable as long as fulfillment costs exceed gross margins. I heard that somewhere before<G>
AMZN is clearly building loyal customers. As far as what
the customer pays, consider that for many people, going out to a retail store, even one
that discounts, would be considerably more expensive and time consuming, assuming one
could find the right merchandise.
This begs the question regarding online competition.
Though I judge investments on fundamentals (not on the basis of technical analysis),
factors such as customer service are important in creating a difference between stores
that sell essentially the same products. To keep this edge, AMZN recently bought a
software firm, just to obtain services of the kinds of experts that have given AMZN the
edge in online selling.
Please explain what edge.
Glenn |
