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CNBC had an interview with Thomas Stemberg, co-founder of Staples, in which he advised retailers about how to do battle with Amazon: "You have to go down there and fight in the trenches." He argues that retailers have use low prices as their best weapon, suggesting that when Amazon has to collect sales taxes around the country, it will level the playing field in a way that will hurt Amazon and help competitors.

Stemberg also tells CNBC that "the big issue here is that Amazon is selling products at margins that are not sustainable. And for the longest period of time, they've been able to convince Wall Street—'Trust us, we'll make money some day.' At some point in time, there's a day of reckoning."
KC's View:
First of all, let me make something clear. I'm aware of how accomplished Tom Stemberg is. He created Staples. All I've done is create MNB.

But … if the CNBC story accurately reflects his views, I'm afraid I disagree with him.

Sure, pricing is important. But I feel strongly that most retailers are going to have to find and exploit differential advantages that have nothing to do with price if they are to compete with entities like Amazon. (By the way…this is what Staples appears to be doing.)

I'm not persuaded that the sales tax issue is going to be significant. That's not been Amazon's experience, for the most part.

And finally, Amazon has profits. It just invests them in growth, in laying the infrastructure that essentially raises the bar on service and value and availability, making it harder and harder for other companies to compete with them effectively. That's different from not making money. I suppose there will come a point when it cannot do that anymore, but in the fast-evolving 21st century economy, that point may not be now.