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To: Glenn D. Rudolph who wrote (31158)	12/25/1998 4:24:00 PM
From: Jack T. Pearson	Read Replies (2) \| Respond to of 164684

Your explanation of the costs of fulfillment are very clear and I think I agree with everything you said about fulfillment costs. The question is whether those costs offset savings elsewhere in the model, such as "pull" rather than "push" inventory control. In any case, what you say applies to all on-line retailers. Dell understands fulfillment costs very well. They coordinate shipment from the factory that builds monitors so that it ships directly to the customer without going to Dell first. Factory costs are a bit higher but are more than offset by the savings in warehouse space, inventory control systems, and inventory obsolescence. That probably isn't possible in the book business, except when I order 50 copies of the same book, which I sometimes, but not usually, do.