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

To: Bill Harmond who wrote (25169)	11/9/1998 11:37:00 AM
From: Rob S.	Respond to of 164684

B & N would be unlikely to do anything as blatant as that. However, if you thought that Amazon will continue to grow and would use similar tactics as WallMart has used so successfully to force down the costs from their suppliers, then the Bertelsmann and Ingram Book deals have a tremendous impact. Amazon has planned to use increased purchasing power and EDI to force their suppliers to lower priceing - "volume and efficiency" discounts that would have made their costs lower than physical stores and other internet competitors. The management of the publishers, such as Bertelsmann, aren't idiots and they can see Amazon's and others end-game would put them into a less powerful position. The consolidation of purchasing power started long before on-line sales with the large chain book merchants and then the super stores popularized by B & N and copied by others. This has cut down on the number of "mom and pop" book stores to whom publishers and distributors could dictate pricing. With B & N controlling a large portion of the distribution network, they can more effectively dodge the pressure to reduce pricing to Amazon. They can't openly give barnesandnodle.com better pricing on similar quantity but under the covers they can give preferential treatment. The most important thing will probably be that they will gain access to strategic information that will allow them to market more effectively against Amazon.