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Technology Stocks : Value America (VUSA) - Another eBay? -- Ignore unavailable to you. Want to Upgrade?

To: Matt Kaarlela who wrote (552)	10/8/1999 7:54:00 AM
From: opalapril	Read Replies (1) \| Respond to of 734

Passing by and thought I'd add my two cents. Sorry if this is a downer, but maybe it will inspire you to argue me out of my convictions. I have no position in VUSA and I'll share why. I looked into VUSA several months ago and decided against investing for three basic reasons. First, a comparison of VUSA retail prices with other internet sites consistently showed VUSA to be among the highest. I don't know if it still is. Like most people, I'm not inclined to give it a second chance in the absence of any compelling reason because there are so many competitors, which leads to ..... Second, I am very skeptical about the long term survivability of most internet "department stores." That skepticism deepens as everybody and his aunt adds a web site to their bricks-and-mortar shop. Which leads to.... Third, it's simply too easy for anyone to enter this pond. Your average twelve year old can create a virtual department store. In fact, many of them have! Even if the VUSA business plan sees some measure of long term success, I believe it will sail under such flagships as AOL, Amazon, Yahoo, and Ebay. They are being driven into a kind of "retail convergence" where everything-you-want-to-buy is available at one site. I'm no business major, but I suspect this is because of the natural behavior of Web consumers. The vast majority feel more at ease and quickly become habituated to shopping (when they buy over the Internet at all) directly from desired retail name-brand sites (e.g. Land's End) or through a known and trusted "branded" site. Small price differentials, if VUSA could manage them, matter less than convenience, familiarity, and trust -- especially on the anonymous Internet. In short, VUSA came to the party too late with too little. There is nothing to distinguish it from the competition. Internet shopping through lesser known sites is just not the same as brick-and-mortar shopping, and the difference strongly favors familiar, branded sites. In the real world, some people are inclined to spend time and energy going back again and again and getting to personally know the Mom-and-Pop bookseller around the corner. This can lead to doggedly buying from them whenever one doesn't want to use Barnes & Noble's web site. In the virtual world, that's not possible. Return to a site as often as you like, and you "know" the owner no better and on no more personal a level than before. Think of your own home town shopping habits when there is something you go shopping for. Why do you frequent this place or that? (1) Convenience. On the Internet everyone is equally convenient to your home or office. (2) Availability. Everything is available at many locations on the Internet. (3) You know and trust the owner/store. On the Internet branded sites have the edge and lesser known sites face a wall of distrust. (4) You know and like the owner/sales person personally. Not done, generally, on the Internet. Someone might want to try to overcome this, but it would be very expensive to assign a "personal shopping helper" to every customer. Not to mention American Business already craps in its own soup at brick-and-mortar stores like Sears, K-Mart, etc. by hiring minimum-wage morons who don't know the product they're selling. (5) You have been attracted by an advertisement offering something specific you want. That's why the www is getting clogged with banner ads and why the cost of those ads is increasing. (6) Word of mouth from a friend. But the friend was likely driven by 1-5, above. Add it all together and the business plan for VUSA looks bleak to me.