Tuesday, December 28, 2004

    Flexing Plastic

    Visa, the No. 1 card issuer, said spending by consumers and businesses on Visa branded payment cards during the past week, from Dec. 20 -26, totaled more than $25.4 billion, a 31.8 percent increase over the same period last year. (CNNmoney)

    What makes one business do better than a competing business? If you can answer that you are worth much money. Why did Amazon.com make record sales while Sharper Image had disappointing sales? For those two examples I believe it comes down to the basic cost-value equation. Sharper Image does not offer much in the way of discounts yet they have unique product offerings. Amazon.com discounts most all of the products they sell - most all of which you could buy elsewhere. So would you want to buy a distinctive watch from Sharper Image or a nice one from Amazon.com that carries a discount as well as potential free shipping? The free shipping + discounts = sales proved to be a winning formula for Amazon.com.

    Overall the consumer confidence is up, and overall that's good. Perhaps we are not in the awful state of affairs that some have tried to make us believe - shame on them.

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