"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.
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."
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