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To: Lizzie Tudor who wrote (2512)	3/27/1999 4:47:00 PM
From: Technologyguy	Read Replies (1) \| Respond to of 28311

I agree with most of what you're saying, Michelle. There are huge efficiencies in implementing distribution automation. As you say, Dell has done a great job of this. However, in businesses where products are relatively interchangeable, once your competitors have made the investment in developing and implementing efficient online purchasing, production and distribution systems, margins will tend to fall. The companies that will get squeezed in this scenario are those that: 1. Stick with the old, less-efficient methods and don't or can't offer enough convincing value to customers to justify the inefficiency, or 2. Adopt the new Internet-based methods, but try to slap that on top of their traditional practices and end up losing focus. (Compaq may be in this category.) Dell, as you note, has been successful both because it has been able to differentiate its products in terms of quality and because it has been the only, major producer to adopt the highly efficient methods and have that be their sole focus. We shall see if they are able to retain that kind of lead as other PC manufacturers begin to undercut price at the same quality level and adopt Internet-based ordering, production and distribution.

To: Lizzie Tudor who wrote (2512)	3/27/1999 4:56:00 PM
From: GraceZ	Respond to of 28311

>>started applying their infrastructure to heavy durables, it would be a different story... I think the street is counting on that which is why amzn trades where it does.<< I have a very heavy treadmill that I ordered from Onsale. It never was seen or touched by them...it came on a truck from the factory straight to my door. I could have gotten it at the Sears or the discount store Dick's down the street for a hundred dollars MORE and then paid sales tax and for a truck to deliver to me. I had a client that wanted advice on getting a computer locally....because she needed a 21 inch monitor she was concerned about how difficult it would be to return if she bought it mail order. I said "What is easier, schlepping it into your car (I move these things all the time, they're bears) and then across town to return, or packing it up in the box it came in and letting in the guy in brown to pick it up?" At this point, if you are a VAR you better be adding some value or you are not going to get my business. As for tractors, I have a good friend who makes a very healthy profit putting heavy equipment in containers here in the US and shipping them to Africa...he sells a lot right off the website and holds nothing in inventory. GAZ

To: Lizzie Tudor who wrote (2512)	3/28/1999 11:35:00 AM
From: Killswitch	Read Replies (1) \| Respond to of 28311

I think when you are talking about how Amazon and other e-retailers of traditional goods are dealing with low margins due to competition, you also have to consider "are those goods always going to be low margin?" For instance, I have a high speed line to my apartment here, and can download a complete uncompressed CD (say around 600 megs) in around an hour. MP3 would cut that by a factor of 10. So why do I have to wait 3-7 days for my CDs to arrive by mail (and pay the delivery company's fees)? This applies to anything using a "media" for distribution that is currently not being distributed electronically... newspapers, magazines, books, video/movies. Just a matter of time (less than 10 years, maybe even 5) until all of those are primarily distributed electronically. Even movies, which require the most bandwidth of anything are now going to be done digitally in your local movie theater. So Amazon may not be as bad off as you might think ? Actually they will probably still be in a bad spot since they'll still be paying the music companies/etc. for the data, rather than other types of information that can be sold at no cost. Of course when you are downloading your music, where do you put it? You need a media server for your house/apartment that will hold all your "stuff" and serve it up to your tv/stereo/portable hi-res monitor/etc. Anyone know of some interesting companies working on this area? Also high-speed wireless access to your media server while you are on the road or just jogging around would be sweet... just a pair of headphones with a wireless receiver built in and you can listen to any of your CDs anywhere.