[KenJackson]

Originally Posted by Kali Yuga

However, you are vastly underestimating the resources involved.

You still need rock-solid web servers, secure credit-card processing, sophisticated databases to both run your website and track sales, customer service, advertising, and people to set up and run your company and system 24 hours a day, 365 days a year. You are not going to have much luck running a setup like that out of your cousin's basement.

I don't doubt your analysis of what's needed, but let's handle my end from a different perspective. How big would I need to be in relation to Amazon? Could I start with startup capital equal to 1/100 of Amazon's capitalization? Surely. How about 1/1000? Could I possibly compete with a starting capitalization of a meager one ten-thousandth of my main competitor?

Googling reveals Amazon.com's (AMZN) capitalization at about $82 billion. One ten-thousandth would be over $8 million dollars. Would that get me a rock-solid web server, databases, automated order-fulfilment, etc. and keep me going with a handful of employees (no need for shipping or receiving!) plus advertising (no need for a warehouse!) until I became profitable?

I'm not even very interested in the answer because it's an unfair question. An ebook-only store doesn't have to invest in stock (books) or support thereof, whereas a large part of Amazon's investment must surely be stock (books and other products) and the means to warehouse and ship.

Originally Posted by KenJackson

I went looking for a bar graph or chart of annual book sales vs publisher but couldn't find one. It would be interesting to see if the tail is as long on that graph as you suggest.

Originally Posted by Kali Yuga

I'm not sure what you mean by that, ...

I'm suggesting you implied the other kind of graph. That's interesting and applicable. I hadn't thought of it.

That is, I had been only considering a graph of sales vs individual book titles. But you made me wonder what it would look like if we graphed sales vs publishing companies, since I am guessing I could get an agreement per publisher instead of per book.

There has been some interesting feedback in this thread, though I'm loosing interest in pursuing it. The key point hasn't changed. Amazon's ability to stock very low-volume books due to their overall huge volume (the long tail of the sales vs individual book graph) is taken to it's extreme with ebooks, which require no stock at all regardless of their sales volume.

And I further contend that this opens a new door for competition because the new long tail should be exploitable by much smaller companies.