The Digital Skeptic: 'Amazon Dot-Org' as Vulnerable as Anyone Else

"So you come to trust the markets to tell you what companies are or are not worth," he said. "The numbers are the numbers."

I pointed out that said numbers for Amazon are now hard for me understand: price-to-earnings ratios of roughly 3,600 times earnings and net margins that make T-bills look rich. Shapiro walked this skeptic through the history of selling technology to customers, with the lesson that what works one minute may simply does not work the next.

"Retailers come and go," he said.

Whatever works is what works
Shapiro pointed out that original discounters such as E.J. Korvette essentially invented selling at a lower retail price by leveraging the buying power of its many stores to sell below the manufacturer's suggested retail price, even as showroom merchandiser and catalog showroom fads brought many brands into one store.

"Or take Circuit City," Shapiro said. "That was a revolution when it started, this big box store of nothing but electronics. But faster than anybody realized -- even me -- markets figured out that it was not well run."

Shapiro was clear that he believes Amazon provides a top-quality experience and he is excited by the investments he sees the company making. He was also clear that he is neutral about the value of the company. But to him, the new line in retailing is no longer about how the Web competes with bricks-and-mortar stores or even for mobile selling.

"Randy Fry is the chairman of CEA now," he said "And my understanding is Fry's Electronics does well in stores and on the Web."

To Shapiro, the important distinction in retailing these days is about how much active support the seller gives to customers as they shop.

It's not the Web, it's the level of assistance
To Shapiro the story is how smart retailers are getting clever about leveraging whatever platform is at hand -- the Web or the phone or face-to-face -- to support the consumer purchase process. Some, including the Wal-Marts (WMT) of the world, prefer to let the customer do the heavy lifting. Others, such as Bang & Olufsen, bet charging to give support will pay.

"It is now all about assisted versus unassisted selling," he said.

So where does Amazon fit into this emerging assisted/unassisted spectrum?

"Only the market will tell," he said.

As Shapiro walked me out of his office, back to the show floor din, I tried one last time to get him to share my fears of a consumer tech world where a critical market organ was entering valuation territory I'd never seen before. He would not budge.

"It's just part of the process," he shrugged. "I can't help but be optimistic."

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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