***OT (and insubordinate?)***A suggestion for the group. Please read the article cited by Sam. There has to be an easy way to make money off the net (besides gambling in the Internet stocks).
I don't mean an internet bookstore. But it seems there has to be a way to cash in on this Internet boom, while it lasts. Build a business for its long-term value, but go public and sell out in six months or a year. <G>
Here's a provisional list of company officers/leaders/whatever---
Stitch, Master of Diplomacy and General Leader
Lawrence Kam, Master of Finance and Warfare
Yogi, Master of Strategic Planning
Gottfried, Master of Charting
Robert Douglas, Master of Etiquette
Sam, Master of Patience (for sticking with SEG)
mano, Mark Oliver, PX, tom pope, Z Analyzer, et al, Masters of Portfolio (to be assigned as needed)
www3.techstocks.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Talk : Computers : PC Sector Round Table
To: Yogi (1475 )
From: Sam
Tuesday, Mar 2 1999 10:47PM ET
Reply # of 1488
Yogi, all book lovers,
"Stop me before I have to build another bookcase..."
How about building a book business? "For about the cost of one share of Amazon.com,
you can be Amazon.com." And we thought the barriers to entry in the DD business
were low!
Read on:
Friday, February 26, 1999
Copyright 1999 The New York Times
FOREIGN AFFAIRS / By THOMAS L. FRIEDMAN
Testifying before Congress Tuesday, Alan Greenspan wouldn't exactly come out and
say that there
was a little irrational exuberance behind some of the Internet stocks, but he said these
share prices had
reached levels that gave him "concerns."
Well, if you really want to be "concerned" about the levels of some of these profitless
Internet stocks,
such as Amazon.com, you should pay less attention to Mr. Greenspan and more
attention to what's
going on in a small house in Cedar Falls, Iowa.
There, a single Iowa family, headed by Lyle Bowlin, is re-creating Amazon.com in a
spare bedroom.
I tell you this not because they're an immediate threat to Amazon.com, but to
underscore just how
easy it is to compete against Amazon.com, and why therefore I'm dubious that Amazon
and many
other Internet retailers will ever generate the huge profits that their stock prices suggest.
Lyle Bowlin is the director of the Small Business Development Center at the University
of Northern
Iowa. He is also a book lover. But having grown up in small Iowa towns, he has always
regretted that
he never had access to a good independent bookstore, with lots of titles. When the
Internet and
Amazon.com came along, said Mr. Bowlin, "I realized that in my spare time I could
create a virtual
independent bookstore."
So first he set up a commercial Web site -- www.positively-you.com. Then he
contacted the very
same book wholesalers that Amazon.com uses and discovered something interesting --
that to get
virtually the same volume discounts that Amazon.com gets, all he needed to do was
order five copies
of any particular book.
The other accouterments were just as cheap: He pays an Internet service provider,
ACES, $30 a
month to house his very colorful Web site, and $30 a month to Americart to enable
people to charge
books on their credit cards over a secure server line. He pays his bank $50 a month to
manage the
credit card transactions, and has $40 a month printing costs, largely for his own monthly
book
newsletter.
"I have no employees," says Mr. Bowlin. "My daughter does the accounting, I maintain
the Web site
and my wife does the shipping. Altogether, I only need to generate $150 a month in
profits to cover
all my expenses, and the rest is cream."
Once he was set up for business, Mr. Bowlin just spread the word among his neighbors,
colleagues
and friends that not only could he offer them everything Amazon.com did, but he could
do it cheaper
and make a profit from day one. He now has customers from 23 states and Canada. It
is funny to go
to his Web site and see it offering "Millions Of Books At Great Prices," knowing that it
is all being
done out of his spare bedroom -- as a hobby!
Here's the deal: Amazon.com offers "The Testament," by John Grisham, for 30 percent
off retail
($19.57), plus $3.95 shipping and handling. Mr. Bowlin sells it for 35 percent off
($18.17) and $2.75
shipping and handling -- $2.60 less. How? Like Amazon, Mr. Bowlin buys "The
Testament" from
the wholesaler for 44 percent off retail, but since he has no overhead or advertising
budget he can sell
it for 35 percent off. He can deliver the book through the U.S. Postal Service within
three days for
only $1.63, so he makes $1.12 more on shipping for each sale. Total profit: $3.65 per
book. Plus,
says Mr. Bowlin, "when you charge a book, I collect your money within a few days
from Visa, but I
don't have to pay my wholesaler for that book for 30 days, so I have a free loan which I
earn interest
on -- just like Amazon."
Because his profit margins are razor-thin, Mr. Bowlin, like Amazon, needs repeat
buyers. Amazon
gets them by offering useful information about books. Mr. Bowlin does it by offering any
government-certified nonprofit organization a donation of 10 percent of the purchase
price of any
book that any nonprofit or its members buy through him.
So the next time your broker tells you that this or that Internet retailing stock is actually
worth some
crazy multiples, just think for a moment about how many Lyle Bowlins there already are
out there,
and how many more there will be, to eat away at the profit margins of whatever Internet
retailer you
can imagine. It only costs them $150 a month and they can do it as a hobby! Or think
about it like
this: For about the cost of one share of Amazon.com, you can be Amazon.com.
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