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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: a.m. fisher who wrote (17637)	2/22/1999 10:28:00 AM
From: Boyd Zander	Read Replies (2) \| Respond to of 44908

ON-LINE RETAILING STAMPEDE The following are some excerpts from an article printed in the Monday Chicago Tribune. I apologize if anybody has a problem with me cutting it up as it was too large to post, I thought. It does provide a good discussion about the quandary facing our competition related to how to actually make money in etailing. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX chicagotribune.com "A few years down the road, on-line shopping will capture not only about 25 or 35 percent of total retail sales, but beyond that," said Kurt Barnard, president of Barnard's Retail Trend Report in Upper Montclair, N.J. "It is going to create a vast revolution across all traditional lines of retail distribution." But it's easy for starry-eyed entrepreneurs to overlook a problem with on-line sales: The high cost of getting customers. A November study by the Boston Consulting Group of 127 Internet retailers found that e-tailers spend about $26 to generate each on-line order. Compare that to $2.50 for a traditional retailer and $3 for a catalog operation. On-line retailers spend 65 percent of their revenues for advertising and marketing, as opposed to 4 percent for traditional retailers and 6 percent for catalogers, the study found. Without a doubt, Amazon.com Inc. is the role model in the spend-all-and-make-none game. With a market capitalization of about $16 billion and revenues of $610 million last year, the company still hasn't made a single cent in profit; last year, it had a net loss of more than $124 million. But the lack of profits can't go on forever. "It's kind of easy to be not concerned with profits when you've got all this capital coming at you," said Sid Doolittle, founding partner of McMillan/Doolittle, a Chicago-based retail consulting firm. "The question is, how long is that going to last before the investors start to get cold feet?" David Risher, Amazon.com's senior vice president for product development, says that day is far off. The pot of investment gold is not even close to running out, he says. "What will have to happen is that we'll have to run out of ideas and run out of ways for us to continue to invest," Risher said. "When we see opportunities of this size coming on this fast, the thing we think is the responsible course of action is to continue to invest very aggressively." But as the number of Internet retailers continues to skyrocket, it will be tougher to win loyal customers, and marketing costs will continue to rise. Risher said its advertising partnerships with huge portals like America Online and Yahoo--in addition to profit-sharing agreements with 180,000 smaller on-line companies--help Amazon.com spend its advertising dollars wisely. Art.com and other e-commerce sites use similar "affiliate marketing" strategies. Amazon.com, Art.com and others in their position say they are making an investment in the future. After all, it's not cheap to build a brand from scratch and get your name before the public. Lucky for them, their lack of profitability hasn't appeared to concern the stock market, though. "The stock prices, they're going through the roof," said Perry, the marketing professor. "Are they ever going to be profitable? Are people just out of their minds or what?" Nobody knows the answers to those questions yet. But the race by companies to get on-line is, indeed, widespread. "I don't think that many of them know why they're doing it," Doolittle said. "It's sort of a stampede." Nobody knows exactly what strategy equals dollar signs. But in the meantime, Art.com and others will continue their treasure hunt, racing to a finish line that is not yet in sight. In fact, it is probably far beyond the horizon. "The time to get in is now," said Lederer, whose 9-month-old Art.com has received $11.5 million in venture capital financing. "There's plenty of room, but don't underestimate what the costs are." XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Boyd>>>> I personally think that as competition increases, the need to invest advertisement dollars to win and keep customers will increase. With that, etailer's will have two options, increase the price of their product or increase their losses o to stay competitive in price. But prior to the introduction of TSIG marketing plan, CD etailers only had to compete against each other, all of them being in the same boat. When TSIG puts their profit producing marketing plan into production in a big way will the competition feel squeezed in any way?? What would be the value of a marketing plan that actually makes money through retail sales over the internet? Finding out should be fun. Take Care All Boyd