As with any other purchase, the buyer must be informed as to the components
to be selected and the compatibility with hardware. No computer will last
anyone for years. With the changes in the technology field adaptive
technology cannot keep pace with the changes, especially with regard to
operating systems. To give an example, Windows 98 is not supported by most
screen reading or voice-output software. However, any new computer will
come with Windows 98, not 95. This is because Win 95 is no longer
distributed, either on the retail market or preinstalled on new PC's.
----------
> From: Kelly Pierce <[log in to unmask]>
> To: [log in to unmask]
> Subject: edu: low price internet retailer
> Date: Sunday, January 03, 1999 8:35 PM
>
> As we have discussed in the past, the cheapest price may not be the best
> option for the blind computer user. buy.com may be great for books and
> cd's, but we often need assistance in selection, service, support, and
> installation. Remember that one is not buying a product with technology,
> but a partner who shares our goal of information access. Paying a little
> more may well be worth the cost to make sure the entire system works well
> together for years to come. For example, one can easily select modems
and
> video cards that do not work with the adapted technology that the blind
> use.
>
> kelly
>
>
>
>
>
> Fortune
> Magazine Issue: January 11, 1998
> Vol. 139, No. 1
>
> Above the Crowd
>
>
>
>
> Buy.com May Fail, but if It Succeeds, Retailing May Never Be the Same
> To become the leading e-commerce portal, Buy.com is selling consumer
> products at cost, and profiting through ads.
>
> J. William Gurley
>
> If you gave it away, would you be satisfied?
> --Sammy Hagar
>
> A few months ago I suggested that in a world where Wall Street seems
> to value revenues and growth more than profits, the ultimate business
> would be to create a Website that sells dollars for 85 cents. As the
> argument went, you could always make up the difference through ad
> revenues. This is pretty similar to what an entrepreneur named Scott
> Blum has actually done. Blum, CEO of Buy.com, is selling consumer
> products at or below cost, and trying to create a brand synonymous
> with low price--with the hope of becoming the leading E-commerce
> portal. He even plans to make up the deficit through advertising.
>
> Talk About It
> Will e-commerce change retailing as we know it?
>
> Speak Here!
>
> Founded as BuyComp.com in October 1996, the company first focused on
> selling computer products at cut-rate prices. Since Blum doesn't want
> to touch inventory, he chose to have wholesalers ship products
> directly to his customers. In mid-November, Blum acquired SpeedServ, a
> lesser-known online retailer of books and video, from Ingram, and then
> changed the name of his company to Buy.com. Blum wants to expand into
> many different product categories; he has purchased more than 2,000
> domain names that begin with B-U-Y, as well as www.10percentoff
> amazon.com.
>
> Buy.com's tag line, "The lowest prices on Earth," may be the most
> precise positioning statement ever. The company is ruthlessly
> committed to being the price leader--even if this means losing money
> on every sale. Its technology searches competitors' sites to make sure
> Buy.com has the lowest prices on the Web. And as far as I can tell, it
> does: 3Com's Palm III Organizer, for instance, sells for $249 on
> Buy.com: At Cyberian Outpost it's $300, $330 at CompUSA, and $369 on
> 3Com's own Website.
>
> The company sold $15 million of products in October and is forecasting
> sales of $19 million in December. At this pace Blum believes Buy.com
> can break Compaq's first-year sales record of $111 million, making it
> the fastest-growing company in U.S. history. Of course, revenues may
> not be the proper metric for measuring the success of a company with a
> potentially negative gross margin. If all you're interested in is
> revenue growth, you could sell a high-priced commodity like oil or
> steel below cost and probably hit $1 billion in your first year.
>
> It's easy to be skeptical of this seemingly crazy new model.
> Predictably, competitors who believe in the standard notion of selling
> goods at a profit blast the idea. It's unproven, says Julie
> Wainwright, CEO of Reel.com. Others point out that retailing is about
> more than just pricing and that Buy.com comes up short on other
> important metrics, such as customer service, ease of use, and overall
> customer experience.
>
> True enough. But there's a lot more to learn by considering the
> implications of Buy.com's success than by taking the safe route and
> predicting its failure.
>
> First of all, if Buy.com succeeds, we'll have proof that it is
> possible to build a brand completely on price. Selection, customer
> service, and user experience all matter, of course, but on the Web it
> is very simple for a consumer to experience these things on one site
> and close his transaction with another--the low-price leader. Several
> Websites offer extraordinary amounts of research on expensive
> brand-name products such as computers and cameras, but their prices
> aren't extraordinary. Buy.com's are, making it a logical final
> destination for any shopper.
>
> Second, Buy.com's success could change the very way wholesalers and
> distributors conceptualize their businesses. Sure, extreme discounting
> by one reseller raises the eyebrows of a distributor's other
> customers. But most distributors will accept this discomfort rather
> than lose sales created by that reseller. The virtual reseller may
> lose money, but the distributor still receives its standard margin.
> Even manufacturers don't seem to mind having their products used as a
> loss leader--provided it's the reseller that takes the bath.
>
> Capital is the natural limit to a business model in which you lose
> money on every sale. However, the company has raised $60 million from
> Softbank, the Japanese conglomerate that backed Yahoo and E-Trade.
> Based on its employee size of about 100 people, the company should
> have operating expenses of $12 million. Even if it loses money on each
> sale and spends marginally on advertising, Buy.com should be able to
> run for more than a year.
>
> Other than lack of capital, there is little restricting Buy.com's
> growth. Unlike traditional retailers, Web-based sellers are not slowed
> by the friction of store growth and local marketing. Brand messages
> can spread like wildfire via bulletin boards and E-mail. More
> important, the virtual reseller--which accepts orders and passes them
> to someone else for fulfillment--is limited only by the capacity of
> its partners' inventory.
>
> Buy.com's success would have an impact on all kinds of
> retailers--starting with Buy.com itself. If the company proves that
> the ad space on a product order form is almost as valuable as the
> product being ordered, another virtual reseller is sure to enter the
> market with even lower prices. That kind of pricing could intensify
> competition between wholesalers and Net retailers. Barnes & Noble's
> acquisition of Ingram Books may be the first in many
> channel-consolidation mergers. Brick-and-mortar resellers, pressured
> by the contraction of the customer supply chain, may be forced to
> restructure. Finally, manufacturers may be increasingly pressured to
> drop-ship directly to the consumer. Of course, there is one big
> winner: you. It's never been a better time to be a customer.
> _________________________________________________________________
>
> J. William Gurley is a partner with Hummer Winblad, a venture capital
> firm. To receive an expanded version of his column, Above the Crowd,
> visit www.news.com; to subscribe to the E-mail distribution list, send
> E-mail to [log in to unmask] with the following in the message
> body: subscribe atc-dispatch. If you have feedback, please send it to
> [log in to unmask]
>
>
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[log in to unmask] In the body of the message, simply type
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