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

To: Glenn D. Rudolph who wrote (9844)	7/10/1998 11:15:00 AM
From: Rob S.	Read Replies (1) \| Respond to of 164684

Happy, happy! A big problem with Amazon is that they are a low margin retail business located in Seattle, one of the "high rent districts" of high tech. Seattle has reached the lowest level of unemployment in 30 years with engineering and software fields brining premium salaries. It's daxn expensive to operate here. About the only way to be competitive in the retail inet business is to lower costs to the bare minimum through automated delivery systems and taking advantage of low cost enterprise areas. IMO, Amazon will not survive as an operation based in Seattle. I've seen a study done by one of the "big eight" accounting outfits that predicts a trend toward lower margins in retail inet businesses. The reasoning is that the ease with which companies can gain entry to the market and customers can find and compare products will systematically lead to a higher degree of price competition than with typical retail businesses. The same technology that makes enormous growth possible also causes an inevitable shift in market mechanism that produces lower margins. Investors who "believe in" Amazon.com should ask serious questions about where the company is headed and how it plans to deal with the changing environment. It is a great concept company and has a certain enviable charm to it, but that is not enough to ensure the company's success. With projected growing losses, how are stockholders outside of the company insiders and venture capitalists going to profit? What is management's plan for reducing overhead and competing on an international scale (inevitable competition) against rivals with cheaper bases of operation?