RE: UKNM: Fast Summit

[Ross Sleight]

Ray wrote:


>Not true! Amazon's "cost to process an average order" in the report is in

>fact a cost to run the whole company divided by number of orders and thus

>includes administration of the company as well as advertising costs in the

>"cost to process an order."


>It would be interesting to see how this $40.81 breaks down into company

>administration, order administration and (Web) advertising.


Ben Wrote:


>None of the figures ICE quotes

>make any sense and include factors that destroy the basis under which they

>are made. One example - during Q2 98 Amazon bought Bookpages, IMDb and

>Telebook Inc. These exceptional items (purchases of companies are always

>exceptional items to some extent) account for at least $5m of that loss.

>Losses after Exceptional items bear no resemblance to operational costs

>(i.e. cost of sale or the amount of money spent processing the order).


>If the ICE report was of any worth simple errors like that one could have

>been avoided (Amazon made an operational loss of $11m in the quarter and

>that is the figure they could accurately work from). By, clearly, selecting

>only figures that emphasis the point they want to make, rather than suitable

>figures I can only treat the report as worth the paper its printed on (and

>I'm not going to print it out).


As I said - a lot of kerfuffle about the report!  Thankyou Ben and Ray for

pointing out many of the report's faults.  I suppose it was incidental to

the actual thrust of the argument but this is a good thread in its own

right.


I took a look at the SEC filings for Amazon - they make interesting reading

at :http://www.sec.gov/Archives/edgar/data/1018724/0000891020-98-000448.txt

(or search on http://www.sec.gov) They show that Amazon spent �38m in

Advertising in 1997 and they currently have a circa $70 per user acquisition

cost (Jupiter figure).  They have a Net Sales total for 97 which is

$147,758,000 and a cost of sales of �118,945,000.  I think that the SEC

details may provide you with the breakdown you need Ray. Did ICE have access

(or use) the SEC figures? 


Ross