Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GST who wrote (38579)	2/7/1999 1:53:00 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 164684

Well, -big surprise here-, I think you are way off base. If Dell sold other peoples' finished goods (in fact they do), they would still be more profitable than everybody else because they manage their supply chain whereas others do not. Their economies of scale are all in the optimal purchase of goods and increased inventory turns. Of course they have a lot of elasticity in the goods they buy that Amzn does not, so theres an advantage that amzn will never have.

To: GST who wrote (38579)	2/7/1999 2:49:00 PM
From: BGR	Read Replies (2) \| Respond to of 164684

GST, Dell doesn't manufacture the terminal, nor the printers that it sells. And they make a profit doing so. Imagine for a second what would happen if DELL were to start selling CPUs from it's Web site when CPU prices are continually falling. (Perhaps memory would be a better example). The local electronic superstore has bought CPUs in bulk 3 weeks back and prices have already dropped by 5% (say). DELL carries no inventory and orders and resells CPUs within a day (say). Who has the price advantage here? DELL's BTO model is only part of the reason for their success. Watch their Supply Chain Management implementation and inventory turnover rate as well. Now for AMZN this model may not apply due to diversity in books ordered. -Apratim.