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

To: H James Morris who wrote (106361)	7/23/2000 2:08:32 PM
From: Glenn D. Rudolph	Respond to of 164684

>Amazon is a B2C player. Glenn, What's your take on the latest Forrester spiel? It makes it sound very pro Amzn...as usual.;-) Forr is about 25 points off its high. Go figure? James, My opinion is Forrester intends to make this sound bullish for Amazon and Forrester focused on pure play B2Cs. Clearly someone is paying Forrester for this research and it is likely not Wal-mart, Sears, Toy r Us, etc. There is a possibility Forrester wants to slant their statistics in a light that best suits those paying clients. Even though the focus of discussion was on a few pure plays such as Amazon and Buy.com, the numbers of dollars spent on-line were not limited to only pure play e-tailers at least from how I read that very long report. The total sales numbers and projected numbers were for all on-line sales from those traditional brick and mortar retailers with an on-line presence to the pure plays. In addition, the number comparisons were odne year over year which is very deceiving in an industry still this new. I believe seasonality should be an issue for retail comparing Q1 to Q2 or eve to Q3. Q4 is always going to be the highest so looking sequentially there may not be as clear. Seqentially comparing Amazon is likely a way to look at their growth and then we can determine if traditional brick and mortar stores are the ones addiding to the on-line sales and the growth is not coming from the pure plays. Amazon's gross revenue in Q1 2000 (which includes shipping costs LOL) were $573.89 million. Forrester states the analysts are projecting Amazon to do $585 million in Q2 2000 in revenue. Sequentially Amazon is only increasing gross revenues by 1.9 percent if the projections are correct. Here is a quote from Forrester's research: "Sales rose 19 percent from $3.38 billion in May, according to the six-month-old retail index. The average amount spent by Web consumers rose 16 percent to $288 in June from $249 a month earlier, the survey said. " It appears that online sales are rising seqentially by about 17 percent a month. That is about 50% per quarter. This is making reference to all on-line purchases to consumers. Clearly, Amazon is losing their percentage share of the total on-line business very fast since monthly Amazon's on-line sales are increasing at about .6 percent compared to the industry of about 17 percent. Other firms selling on-line are increasing sales. That is the only way possibly for on-line sales to grow this quickly and for Amazon to be close to flat. It is likely a good guess that the pure plays that are remoaning are not growing that quickly either so a good guess is the on-line divisions of traditional businesses are growing quickly and they are the ones that are causing the growth of B2C e-commerce. I do not doubt that on-line selling for many products is going to be large. The convenience factor for people like you and me is terrific. However, I do not see the growth going to any pure play since the largest pure play, Amazon, is stagnant. This is from the report: "Greg Konezny, a U.S. Bancorp Piper Jaffray analyst, said the sales accounted for about 1.5 percent of consumer spending last year. That is expected to rise to 5 percent to 10 percent of sales in the next four years, he said. " Assuming that percentage growth is correct and growth of the respective players continue as we are seeing, it appears more than 99 percent will go to brick and mortar online divisions. I see that as a major problem for Amazon. Your thoughts? Glenn PS I believe I can prove this trend. My on-line stores has been fully created by me. I am far from an experience or professional writer of HTML and the navigational abilities of my site are presently terrible. However, sales on-line grew squentially by 225% from Q1 2000 to Q2 2000. One reason the percentage seems so high is the law of smaller numbers. The other is we are able to tell what our customers want to see and buy on-line and not lose money by having the product in the event it does not sell and we take it off line. That product will sell in our traditional stores. Pure plays do not have that luxury. I also want to add I am in a small way competing with Bluenile.com, Miadora.com, Ashford.com, etc. Everytime a customer compares us to them or inquires as to why they should buy from us rather than the pure plays, they end up buying from us. Here are the reasons. 1. Return convenience 2. Sizing, repair warranty and not warranty convenience. 3. The security that we have been in business for many many years and they could come and yell at us if they were not happy. 4. We are not a technology company or a group of people versed mostly in technology but focusing on retailing. We are a retailer and we understand the business. maybe not as well as Wal-mart does<G>, but we understand.