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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Russ who wrote (6782)	12/12/1997 12:31:00 AM
From: soup	Read Replies (1) \| Respond to of 213173

Re: MacWarehouse and the Mail Order Business. Two things to remember about mail order catalogue. First, they derive most, or at least a great deal, of their revenues from product advertising rather than product sales. This following clip is from an editorial from the Bungie Software (Marathon, Myth) website Coming out of the booth on Distribution Myths and Lies. by Alexander Seropian >With entertainment software, a mail order company derives most of its profit from the advertising sales, not the product sales. A full page ad in one of the big Mac catalogs cost about $25,000.00 (times 150 pages is 3.75 Mil... per month!). On a given month we may pay $9,000 for an ad. For the mail order company to make more than that ad price they would have to sell over 1200 units of product that month, which only really happens around Christmas. Consider Microwarehouse, a publicly traded company, which does around $750 million a year. They produce 4 catalogs with a total of over 600 ad pages a month. This generates a mammoth $180 million per year. The remaining revenue ($570 million) generated by product sales, yields only a 20% margin. That makes the ending score $180 million for ad sales, $114 million for product sales. Remember this lesson, it repeats itself later.< bungie.com AAPL's Store does not compete with the CompUSAs so much as catalogue and web based retailers. -------------------------- Second, come January 1, all mail order firms will have to charge applicable local state sales tax. New York City/State sales tax is 8.25%! (Try competing with that handicap!) Equal taxation on vendors' products will give the edge to retailers who can offer service. soup PS. Any comments on the platform convergence possibilites resulting from the MSFT ruling?