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

To: Skeeter Bug who wrote (120141)	3/11/2001 5:33:11 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

>>The net is not really cutting profit margins that much but rather the retailers are permitting it.<< in my mind, this is six of one, half dozen of another. there IS no difference. the reason the retailers permit it is because they want the internet business. if they don't hack prices then they don't get near the business they want (the reason is net information transparency and ease of substitution). This can't go on forever or there will no more B2C e-commerce. The firm that started this selling $1 for 90 cents was Amazon. That is really true. I do agree going forward that gross margins will fall in the retail sector due to the added ability to compare pricing. Margins also will and have been falling in the B & M sector. Amazon's continued existance is purely due to the quantity of money given to them by the equity markets. It is finaly running out and I do not know if the equity markets will give them more but I really doubt it. In time, and I do not believe a lot more time, the B2C e-commerce will have to raise margins some to remain in existance. They all have to do that so when the pricing structure goes up, it is not price fixing. It is simply survival. The we will be down to 1 to 2% margin variation between e-commerce retailers. At that point in time, B2C e-commerce will be profitable but not not anywhere near the hype that we have heard about. The consumer will be doing better since they will be able to buy products with less margin going to the retailer. The retailer will be giving less margin to the manufacturer, etc. Then we will have successful firms and on ongoing healthy competitive environment. It is my opinion the entire sector would have been far better off had the equity market not have allocated funds to such a poorly run ecommerce firm which is Amazon. I believe when Amazon is gone and the consumer is paying 2% more give or take in margins, you or I will not notice the price differnce and the service provided to us by these retailing firms will be far better. Are we close in our beliefs? I think we are.