Hedged In

Kindle Digital Books Are Already Selling at 35% the Level of Print Books

"And its top 275,000 titles represent 80 percent of sales." I seem to remember from Chris Anderson's work on the long tail that Amazon's long tail in books is *enormous*, ie. the top selling books account for a low % of total sales.

Wall Street Breakfast: Must-Know News

On the Fed announcement, Kirk Shinkle has a good article analyzing it and questioning whether the stock market rally is sustainable:
seekingalpha.com/artic...

Why I'm Selling Apple and Google Today - and Holding Amazon

This was a great call on AAPL.

Fred was right.

Microsoft and eBay Team Up: Desperate or Brilliant?

Outstanding article.

It reminds me of my own experiences during the tech bubble, in 1999. eCommerce companies, public and private, were being judged by (and valued based on) the number of customers they had, not the profits they made. That led to some really weird pricing behaviour. One company, an online drug store that competed with Drugstore.com, offered a $20 voucher and free shipping as long as your purchase was $30 or more. So people I knew purchased $30 of soap, shampoo and other stuff that they'd have to buy anyway. And then they did the same thing for their wives and adult kids.

But here's where it got really crazy. The online drugstore had really bad logistics, so they'd deliver orders in multiple shipments. To make things worse, the packing boxes were huge -- much larger than was necessary for the items themselves.

I remember receiving this huge box. We opened it, dug through a mountain of foam beans, and found at the bottom... two bottles of shampoo. The postage on the box was over $10. The next day, another box arrived, and then another. We paid net $10 for our order. But the online drugstore must have lost about $60 on our order. After the end of the "special offer", we never bought another thing from that store.

That company went backrupt. And the message I took away was that you can't buy repeat customers with one-off, unsustainable discounts or special offers. They'll come for the crazy special offer, and never return afterwards.

Amazon.com Q3 2008 Earnings Call Transcript

Amazon never mentioned the sales tax issue on this call. New York is still charging sales tax for products delivered to New York addresses (including gifts), and that blunts a significant percentage of Amazon's price advantage over physical stores like Barnes & Noble and Best Buy.

The question is: What impact will that have on Amazon's sales?

There's a good summary of the issue here; see also the author's follow up in the comments:
seekingalpha.com/artic...