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

To: Gary Korn who wrote (8752)	7/4/1998 10:04:00 AM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

Not saying it is worth anywhere near $6B, but AMZN very much had its act together on this particular order. And you know I was looking for flaws. Gary, I ordered the identical CD from Barnes and Noble about three weeks ago. I had the same positive results as did you. Next day delivery. Email confirmation of the order and then an email of the delivery. I am not stating that Amazon does not handle orders well. The big three, Amazon, Barnes and Noble and Borders all do. Borders is the least organized at present. They plan on have that problem cleaned up by summers end. There is no advantage to order from one of these firms over the other. The product is identical as we all know. The question remains as to who will become the dominant marketer of their product. I can find all kinds of fault with Amazon's business model which cuts gross margin enough to make advertising and profitability impossible. The cracks in this model are starting to show. The analysts will not admit to this, but the model is not working as planned. The more experienced firms such as BKS and BGP know this now. They certainly have an option to use Ingrams and get paid upfront for online sales. They chose not to use this business model. I believe they base their decision on the 8-10 percent higher costs of goods sold. To state AMZN should have a market cap of $6 billion is ludicrous. They have a negative equity. The future in online sales is hughe although I am not sure it is as large as some analysts project. Time will show how big it becomes. My son is home from college for this weekend and we went shopping at the mall. We discussed sitting in front of a computer to make purchase compared to going into a "real" store. He is very computer literate so using the net is not an issue for him. He prfers being in a mall, meeting friends, looking at items etc. That does not preclude him from buying at some point on the net when he knows exactly what he wants. The onlne selling is just another medium that will have a nitch. Just like catalogue sales, etc. Traditional retail will do fine too. The issue remains can Amazon withstand the deep pockets of the competition and the lack of familiarity by not having brick and mortar stores? My opinion is no. I believe Amazon better start highering some good retail people to help run the company before the companies that already have this experience destroy Amazon. There is an art to retailing as there is to any business. Glenn