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To: Lizzie Tudor who wrote (65615)	6/30/1999 1:01:00 PM
From: Eric Wells	Respond to of 164684

Great points you raise - and I agree, that shipping costs will come down as e-commerce expands (due to increased competition among shipping companies, and due to e-commerce companies negotiating better deals). But shipping costs are also subject to other factors - such as fuel prices. It was interesting to note that in the Reuters story on FDX earnings, it was stated that part of the increase in FDX profits for the quarter was due to a decrease in fuel costs. I am in no position to predict the direction of fuel prices and what impact they will have on shipping - but it does seem that this is an area of risk. Should fuel prices go up, it could negatively impact e-commerce companies, such as Amazon (depending on price sensitivity - which would be greater for items that have a higher shipping cost). Of course, increasing fuel prices will have a negative impact on the economy as a whole. Thanks, -Eric Wells