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

To: Randy Ellingson who wrote (107517)	8/25/2000 11:48:15 AM
From: Glenn D. Rudolph	Read Replies (3) \| Respond to of 164684

Certain people and certain items will always do best with in-person shopping, but the majority of purchasers and products are best (and cheapest, especially with today's effective tax-free loophole for interstate customers) bought online. That's where the deepest discounts are found, in general. Randy, We likely agree here on almost everything. I do not believe that the future will permit a profitable model for on-line sales if they are always cheaper. However, I do believe people will be willing to pay a little more for the convenience and selection. Currently there is kind of a price war on-line. Meaning the margins are not high enough to pay for the extra labor involved to do the fulfilling for the customer. This will change in time and margins will increase either by greater efficiency or higher prices. I do not consider paying a little more on-line a negative. We will leave tax issue out of the equation for now since at some point, on-line sales will be taxed. I am sure there is a lot of trial and error in the on-line business presently. How much does revenues slow if pricing is increased? Who really knows? Not enough history. I still think the annual sales for CY2000 will surprise people. Should be interesting to see; their first $1B quarter is not far off. The much higher sales will not surprise me. It is a growing market. Amazon is the large player and surely will get their share. Every good brick and mortar firm is opening an on-line division. I believe it is necessary to have dual channel selling. One would be leaving out a large market by ignoring this channel. It is not just the selling but the "in your face" presence. So we will see how this plays out. I worked very hard on my site this week and will next week. We plan a "Grand Opening" of the site which gives us the opportunity to run a Grand Opening sales in our brick and mortar stores too. I have not seen any other brick and mortar firm do that. Maybe the ones I have heard of are in too many states and there might be a sales tax issue for the on-line site. My stores are only in PA so for sales in PA, I have to charge tax regardless. This seems like a good tie in and a way to sell both on-line and off for layaway for the holidays. We installed computers using DSL in our brick and mortar stores for our customers so we can aquaint them with our site. Just in case they missed our advertising<G> If they buy a gift certificate on-line even using the computer at the store, they receive a bonus of 15% which is used just as cash in the store. For example, a $100 gift certificate purchase, will get them a $115.00 gift certificate which they can use that moment right in the brick and mortar store. They may also give it as a holiday gift or do whatever pleases them. The denomination is irrelevant since it is a 15% bonus on the dollar amount. The plan is to get the customer to register with us and provide their email, etc. I am really excited about this because it is uncharted territory for me and I am not aware of other brick and mortar firms doing this. We will advertising using traditional print, radio and television and hopefully many will use their computers at home. By the way. the 15% bonus will only be available for a week. We do not weant to give the store away so to speak since we run other sales and a thinking ahead customer will buyt the ceritifcate during the grand opening week and then use it when we run a holiday sale. That will cut some margins but for only a short time. I sure was wordy LOL.