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A new partnership from upstarts txtr and Readerlink will allow grocery stores and drugstore...

A new partnership from upstarts txtr and Readerlink will allow grocery stores and drugstore chains to sell ebooks to customers. The program directly aimed at the dominance of Amazon (AMZN +2.8%) and Barnes & Noble (BKS +0.8%) in the market. The bigger issue: If retailers can bundle more digital and physical offers together on their websites, what's to stop them from turning the tables on the Internet giants a bit?
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  • Michael428
    , contributor
    Comments (742) | Send Message
     
    I got my degree in economics in the early 70s.

     

    Anyway one of the things we learned back in the good old days (which I am sure you learn today) was the term "barriers of entry". Simply this was how hard it would be for a new company to start a similar business and compete.

     

    So in the early 70s, very few people drove foreign cars, even though I had a VW bug. And with that our professor used the auto industry to explain this "barriers of entry" terminology. At that time there were 4 major U.S. auto companies which were GM, Ford, Chrysler and America Motors. The professor simply told us how hard it would be for some competitor to start a business and compete with these companies because of the investment required (assembly lines, etc). Pretty simple.

     

    So what are the barriers of entry to compete today with Amazon? Is Amazon's data so hard to replicate? Google and Facebook have data and to a lesser extent every retailer that does e-commerce captures data.

     

    I do not understand what the market is seeing in Amazon's stock. Maybe they should have taken some economics with me 40 years ago.
    7 Jan 2013, 02:51 PM Reply Like
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