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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: dbblg who wrote (95627)	3/6/2000 1:08:00 PM
From: Bearded One	Read Replies (1) \| Respond to of 164687

Not an insignificant opportunity. If they execute, they will have resolved the tension between "web as land grab" vs. "web as frictionless brutal price battlefield", and on Joe Q. Public's nickel at that. But the tension has already been resolved. The web has been around for several years now, and nobody has been able to raise prices or cut costs sufficiently to turn a reasonable profit in the consumer book market. We know that if a mail-order - excuse me, internet- company does not deliver, that they will lose customers. That's what happened to ToysRUs. We also know that the cost of delivering to customers is very high. That is Amazon's experience. And we know that Amazon still has their coupons and 50 percent off deals. So it's a brutal price-cutting service-providing frictionless battlefield. There simply is no question anymore. The fight is over. Consumers won, as they always do when new technology comes up. Margins get reduced, and unprofitable busineses fail. Amazon is just about the most unprofitable mail-order business in history. It's just a matter of waiting. That depends on whether or not you believe--as your heroes at (offline) Barnes and Noble do--that demand for books and music is elastic to time and convenience, rather than price Gross margins trumps elasticity. Even if many more books are sold, there's still that frictionless price-cutting service-providing battlefield. Part of the rationale for book superstores was the realization that the target customers would gladly spend more money on books if they didn't find the experience of going to bookstores so frustrating I'll reword that a little bit: customers would gladly both go to bookstores more often and buy more books at the bookstores if they didn't find the experience of going to bookstores so frustrating Barnes and Noble made it fun to be at a bookstore and easy to find the book you want. Thus, people went to the bookstore more often, stayed in the bookstore longer, and bought more books. Wandering around Amazon's website is not 'fun', it is convenient. Is Amazon going to download lattes to their customers? Maybe have some webcam poetry readings? It's just a totally different market. And again, the evidence is in about what that market looks like. >>People like to actually see the television set they're going to buy. FWIW, the market research on this suggests that they don't. (At least in the segment of the market that is buying mid-range stuff, i.e. brand names like Sony or Toshiba, but nothing over a thousand bucks.) Fair enough, my own fault for generalizing. Enoughpeople like to see what they're going to buy to restrict internet sales. And then there's that whole return/service thing about electronics. The bigger problem is that people who don't have a problem paying 20 bucks for a book which can be had for 10% less a few mouse clicks away, balk at paying 600 bucks for something available elsewhere for 540. So we're in agreement on this. Ok, now what about Drugs, PetFood, and other nonsense? Gee I have a headache, better mail-order some tylenol.