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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: David A. Irvine who wrote (36249)	11/18/1999 2:38:00 PM
From: ztect	Read Replies (1) \| Respond to of 44908

Dave.... I agree, especially in lieu of history, not to high expectations. However, I also think some qualifications have to made made and questioned asked regarding cd etailors and follow through. Regarding other cd etailors, revenues of cdnow, amzn, ktel, and many other etailors are presented in many of their filings as "gross" revenues before backing out the costs of these products. The real revenues are the net amounts received For example, in 1998 cdnow sold 51 mil but had costs of 45mil. So their real revenues were only 6 mil. (Btw. at the end of 1998 cdnow had been in business only three years. And, I'd have to double check but I think they exceeded net revnues of 1 mill. in their 2nd yr. However, cdnow, has never had earning and actually had huge losses before being bought out). The advantage of such accounting is that it gives a clearer indication of volume. Cdnow and amzn significantly increased volume. Increased volume through an economy of scale helps to reduce costs slightly. But the bigger advantage of demonstrating increased volume has more to do with the value of the website as advertizing space more so than the revenue derived from direct sales. Buy.com is actually selling below costs on many items to generate traffic assuming the value of advertising space on their internet website space will more than offset their losses from sales. Now as we all know revenues aren't earning. Increasing revenues without containing costs doesn't make companies any more viable. (Except maybe on the internet). CDNOW and amzn spent and are spending way more on advertising in an effort to establish their company names as the pre-eminent providers of their items. This is called branding. Amazon doesn't project now to have earnings until 2003 from what I understand. Though if when you think of online books and go to Amzn, this branding enhances the value of amzn as both a "mall" (eg zshops) and helps to maintain amzn website advertsing space's value in a market diluted by other competitors theoretically giving them multiple revenue streams. Tsig appearred to be reporting net revenues.. Now I don't in any way wish to place tsig's existing commerce site in any such league as amzn. But by giving examples though, I'd have to note that unlike cdnow , tsig "theoretically" is less dependent upon the direct sale and derives as much or more revenue from the "card" sale. The card sale also is an indication of the customer base. In what hopefully will be future reports, a breakdown of revenues from cd's and card sales would be illustrative. At this early phase in the company's history, it would be nice to see card sales far exceed cd sales for two reasons. 1. Card sales indicate a "repeat" customer and 2). Card sales have higher margins. Unlike at cdnow the set of eyeballs and cd purchaser has no reason other then familiarity to come back and make another purchase. CDnow spends a tremendous amount for returning eyeballs Tsig would also benefit themselves by clearly noting the amounts of contributions that were shared through the profit sharing from card sales for both marketing the card to other charities and demonstrating Goodwill. The indication of participation by schools is positive obviously because its the first step. During the BR League attempt it was never clear how many, if any, teams were participating. Now I think what is critical for tsig especially without a distributor network, is what support they provide to the schools selling the cards. Do the cards sell themselves? No not really. The card isn't as explanatory as a chocolate bar. There will be questions. Will tsig be able to answer these questions? What is LL 's role? Will tsig be able to process checks? These are critical to any success from this program. Something as mundane as check processing is intriguing in light of what Sam told me about his experiences with the BR League. If I'm not mistaken, Sam's team actually sold 400 cards but tsig couldn't process the checks! So Sam's teams ultimately only sold 150 (I'm sure Sam will correct me if I'm wrong). Unfortunately, Sam seemed to be about the only team participating in the program. But then again Sam could have been bs'ing me. Hopefully both card and cd sales will increase enough just to minimze the need for too much more dilutive financing. Anyway, this is just an attempt to look forward, though by no means do I suggest that there necessarily will be anything to look forward to. z