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

To: Glenn D. Rudolph who wrote (60845)	6/6/1999 2:43:00 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 164684

>> A lot of people are looking at it wrong - they envision every product Amazon is selling as being sold below cost (thus the loss); not what's going on. The loss is coming from their massive investment in infrastructure, capability, brand-name development, alliances, etc. --the things that will make them a success over time. Once those Steve, I am starting to sound like a broken record. As long as fulfillment costs exceed gross margins, profits will never exist. That is a fact. One can make arguments as to how fulfillment costs will drop or gross margins will go up but the above statement applies forever. Glenn<< Glenn, Think of the problem this way. Jeff gets the idea that you can sell more merchandise by marking it down to move, thereby increasing customer satisfaction and absolute gross profits even with lower margins. With a much more productive overhead structure designed from the ground up, the company can take share as well as ending up as a more profitable, from the standpoint of return on capital, huge company.