B&N - Amazon.Com

[Cameron Parish]

On Wed, 11 Jun 1997, Camille Del Vecchio wrote:

> 	What I don't understand is how come amazon.com isn't making any 
> money -- you'd think that with no stores, no parking lots to maintian, a 
> lot fewer employees and hardly any inventory on hand, they'd be making in 
> by the sackful.  Does anyone have a theory or some direct experience?  

I don't know how much I can say without violating that dang
confidentiality agreement, but it's not because of the computer
infrastructure (which is, or was, surprisingly weak), and it 
sure as heck isn't because of labor costs.  I'd say it's mainly
two things: first, the book business doesn't have tremendous
markups.

And second, Amazon spends truly fabulous amounts of money on
advertising and PR.  When I worked there, the amount they were 
spending was astronomical; since I've left, I've seen more
and more advertising (not to mention "placement".)  Barriers
to entry are low, and there are lots of other firms, like Borders
and B&N, that already have plenty of name recognition; therefore,
Amazon is concerned with growing enormously and making an 
insurmountable reputation, as fast as possible.  

What can I say?  Based on my experience at Amazon, I sure wouldn't 
invest there.

-- Cam

----------------------------
Cameron Parish      
cameron at serv.net 
http://www.serv.net/~cameron/