Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: JimieA who wrote (8112)	6/30/1998 9:16:00 AM
From: Henry Wolfond	Read Replies (2) \| Respond to of 164687

AMZN generates over $90 [per $100 in Gross Margin] compared with $13 & $10 for the competition. I think any reasonable person would rather generate $90 for every $100 invested compared to $13 or $10. What??

To: JimieA who wrote (8112)	6/30/1998 9:22:00 AM
From: Glenn D. Rudolph	Respond to of 164687

Therefore for $407 in sales they spend $132 in operating costs. To yield an average operating loss of about $42 for every $100 invested in Inventory & property. So it is obvious that they need to reduce the percent they spend on operating costs to generate an operating profit. But the business model they use does have some obvious advantages. Of course, I have been wrong before. Jim, You made an excellent analysis. I thank you. There is a factor that you touched upon that is in this last paragraph. AMZN's operating costs include the advertising. BKS and BGP really did not advertise much until they were on the net. The large superstores did the advertising for them just being visible. There is an investment trade off and to be able to calculate the amount of "savings" the large stores produce in advertising I believe to be impossible at this juncture. There are enough variables here to make ones head spin. I do not claim to know at all. Glenn