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To: Skeeter Bug who wrote (120277)	3/13/2001 12:56:32 AM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

no, i mean they may buy of your website and be willing to pay at or near b&m prices because they trust you. this is one scenario where you can make good margins on the net. in gen'l, though, the net is very bad for margins. SB, I do not believe we are far a part on our thinking if we are at all. I may not have been clear. I agree that the price paid by the consumer is has come down. I was trying to say that a well run retail business will also take advantage of the technology and the communication ability of the internet to make their cost of their product to the retailer be lower. In this way, the consumer obtaines a better price and the retailer loses some margin. The retailer that becomes more efficient in their buying and their cost of operations can reduce expenses so the drop in initial margins is not that bad effectively on the bottom line. The losers will be the retailer that does not effectively use current technology to reduce their expenses. This means the internet is good for the consumer but also is a help to the retailer that uses the best technology currently available. Compared to all the large chain operations I am a very small business. The difference is I enjoy and and persue the use of the internet and current techology to help reduce my cost of goods sold by buying from the lowest vendor and I also can market (advertise) at a lower cost than my average competitor. I can match the price of my competitor and still have enough margin to turn a profit although the net margin is lower. This reduces the number of competitors in my market and the better run retailers survive which I surely hope is me<G> The product I sell in general is not a commodity. Therefore, the selling of jewelry is not ever going to be a large part of internet sales. This is product on average that must be seen and tried on. There are exception such as a Seiko watch. Seiko watch model xxxx is the same everywhere except for the service which is typically not needed. These items sell well on the net and in a sense they are a commodities just like a book, a CD or a DVD. An emerald ring is not a commodity. The appearance of every emerald is different and it needs to be seen by the buyer. The items we happen to sell on-line are a small percentage of our sales for this reason. We sell on-line a lot of watches of various brands at very low margins. I am not trying to market outside my geographic area. We happen to occasionally get a customer out of our geographic area that does buy my product but that is not common. The majority hear of our web site through word of mouth or traditional advertising, browse our product line and then print out a picture of an item that interests them. They then bring that picture into the store so they may see and try on the product that interests them. This makes our web presence more of a marketing tool rather than a direct sales outlet. That would not be the case of products sold on-line that are commodities. The largest selling item in dollars and units on my web site are gift certificates. Most of these gift certificates are bought by men. Men in general, do not know what the women they are buying jewelry for like and often are not familiar with the product in question. The gift certificate is convenient for them. They may buy their wife, girlfiend, mistress or whatever a gift certificate and the receiver is very happy. The receiver then comes into one of our stores and picks out an item she wants and it costs her nothing because the gentleman has paid for it. This also saves time for the buyer who is typically male, so that he may watch a sporting even, go hunting or whatever. This brings up the point that I have been dwelling on for some time. I believe and found it to be true that dual channel selling really works. Amazon can't do this. Yes someone may buy a gift certificate at Amazon but the receiver has no store in which they may go to buy an item. There is no touch feel, look, etc. With us, they can bring the gift certificate into the store. That is also true with Macys, Barnes and Noble, The Gap, etc. This is the best of both worlds for the consumer. My job is to use current technology to make my store more efficient. I can then sell at a lower gross margin but stil have net margins to make it profitable. Maybe someone ought to explain this to Bezos. It is clear in my mind he does not understand this concept.