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

To: Glenn D. Rudolph who wrote (31919)	12/31/1998 9:17:00 AM
From: Steve Yuan	Read Replies (2) \| Respond to of 164684

Hi, Glenn, If it is profitable to sell CDs and books by normal mail order, it can be profitable to do the same thing by electronic mail order. The key is the brand name and marketing expenses. As to the cost of fulfillment, I think the shipping and handling fee is supposed to cover that. Furthermore, because of the convenience of electronic mail order, it has a much broader customer base than normal mail order. For example, I have never used book mail order because filling and mailing postcard is just such a pain. But I have used AMZN. Also, in normal mail order, the choice of books are very limited and usually does not have the books I want. Electronic mail order has conveniently solved this problem. As to the competition between BKS and AMZN, it is true that AMZN needs warehouse, but its warehouse does not have to be in a mall. As you know, the key to the price of real estate is location, location and location. Also, AMZN need only one warehouse for a region compared with thousands of stores for BKS. Another important point about AMZN is that people who purchase books usually have sizeable disposable income. This will allow AMZN to sell other things. Using the same infrastructure, AMZN can easily sell CDs, and DVDs. BKS has no way to do that in its traditional stores. Yes, BKS can set up a site and mimic AMZN's practice. It takes forever for CPQ to learn from DELL. If history is any guide, BKS probably will never wholeheartedly learn AMZN's business model and do it well. Steve