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

To: Jason Ellis who wrote (12082)	7/30/1998 10:05:00 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 164684

Jason, sorry, but you are very confused. First, what pharmaceutical salespeople and the companies they work for make is not relevant to the discussion of the merits of an online drugstore. That's like saying because Kevin Costner got paid millions for making The Postman, the theaters showing it should have fat margins. Second, bookstores do not realize 100% "profit margins" as that would require zero cost of sales. Now, assuming what you meant to say was 100% markups (50% margins) which is what your example comes to, they don't do that either. And if you don't believe me (or the financial statements of all the public booksellers out there), go to the library and pull the latest RMA Annual Statement Studies. Or, just ask your local bookseller. No offense intended, Jason, but you might want to get the financial basics of retailing down before going long a stock like AMZN.

To: Jason Ellis who wrote (12082)	7/30/1998 6:16:00 PM
From: Marconi	Respond to of 164684

Hello Mr. Ellis: Normal profit margin on books is 100% minimum. .... Pharmaceutical product, the profit margin is extremely deep. The pharmaceutical salespersons in a typical pharmaceutical company makes $90K per year, with travelling expenses all paid. I know a few myself, that why I know you can make big money. In fact, name a pharmaceutical company that is losing money? AMZN reports a gross profit on book sales of 22% (selling price less book cost plus shipping). And it looks like AMZN has essentially pegged advertising at gross profit for the near term. As AMZN management points out, many can enter this business and there is no guarantee any margins will hold. I think they are already capped. Pharmaceutical salesmen are relationship sellers, with doctors as their primary audience. It is worth it to the pharms to sell doctors. Pharmacies are the end distributors (which is a different business than relationship sales) and is the business in which AMZN indicates it plans to become mired. In my opinion, not a useful or wise move for AMZN to find something productive to do with the abundant flush money in hand at this time. And yes there are quite a number of tertiary pharmaceutical companies losing money, generally third tier firms, that are endeavoring to join the highly distorted pharmaceutical business with its very heavy front loading and regulatory hurdles, which favor the entrenchment of the present roster of primary firms, economically. It is nearly an irrational business from the way costs have been ratcheted beyond reason for several decades now. Small wonder, much of the rest of the world does not want to participate in the pharm business on the same footing as the domestic and euro firms. Best regards, m