Quote:
Originally Posted by markbot
B&N has very high operating leverage and makes small margins. This means that if their business declines slightly, the losses will be magnified.
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Your argument is based on the idea that the digital market will take away from the physical market. Which, all though a sound argument precludes them from entering into that market. B&N is in the market and thus lost revenue from physical sales should by your logic equate to gained revenue in electronic sales. With out looking at any numbers I am going to be comfortable saying they receive a higher return on electronic purchases then on physical purchases as the labor and deliver costs are significantly lower. So in the end if B&N lost a majority of its physical patronage to its electronic business then it would in fact over time, after the initial hit of store closings, become better off in a business sense.