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

To: Glenn D. Rudolph who wrote (10068)	7/12/1998 12:48:00 AM
From: Dwight E. Karlsen	Read Replies (2) \| Respond to of 164684

Glenn, you should seriously consider sending to Alan Abelson your conclusions re Amazon putting order fulfillment under "marketing" expenses. People tend to look at marketing expenses as necessary, even if they get large and provide no immediate tangible benefits that you can put your finger on, except through guessing. But people still hope and expect that heavy marketing will help build "brand awareness" etc, which does help a company's sales down the road, even if you can't directly prove it. And companies can always "cut back" on marketing to get it through a cash pinch or some other trouble, such as falling behind on order fulfillment. Order fullfillment costs, on the other hand, sap profit from each and every book sale, are not optional, and will not decrease except incrementally down the road through heavy expenditure in fulfillment automation systems. Further, the fact that "many" of Amazon's 800 employees are directly engaged in order fulfillment is proof that this is a human capital-intensive cost -- certainly an entirely different animal than marketing expenses. There is probably nothing that ol' Alan Abelson would like to do, than to dedicate a column to "accounting irregularities" over at the virtual book seller. My guess is that Alan's mouth would positively water just at the prospect of it. DK