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Netflix, Inc. (NFLX) Message Board

  • followdacash followdacash Jan 15, 2004 8:07 AM Flag

    Distribution Center

    New Center open.

    1. Any idea on costs to open center? I would expect with inventory, people hiring and training, equipment, and facility setup, we are talking in the 2-3 million startup first 6 months.

    2. If distribution is key to their strategy, then how many more DC's do they have to setup to reach their growth targets?

    The concern here is that Distribution Centers do not add one single customer AND they impact earnings. They may help keep customers (due to delivery times).

    I just do not understand their desire to add more DC's. If you want to be low cost, then do not add more brick and mortar. Shipping is cheap in comparison.
    In addition, as stated before, they do not want to be too efficient. Above 5 rentals a month, they begin to lose money per customer. Don't make it too easy for customers to order more than that.

    Just my thoughts.

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    • "Actually, Walmart claims 16,000 titles to NFLX 15,000. FYI "

      Just picked this up from their site:

      Choose from over 14,000 DVDs!

    • All right, you are right there, but you did quote out of context.

      "Our postage rate per title in 2002 was lower than 2001, notwithstanding the rate for first-class postage increasing to $0.37 from $0.34 on June 30, 2002."

      Despite the USPS raise rates, their bulk rates are lower!

    • I did not say the Oct 10K.

      Look under cost of revenues and gross profit.

      No need to call me a lier. Just ask the next time.

    • I don't work there just relaying what they said. They don't lie. rgs

    • I have read the Oct 31 10-k and I call BS.

      searching for the text string "postage" in the 10-k yielded the following sentences:

      "...conditions that affect our delivery through the United States Postal Service, including increases in postage;"

      "...amortization of intangible assets related to equity investments issued to certain studios, and postage and packaging costs related to shipping titles to paying subscribers."

      "Postage and packaging costs increased by $7.5 million and $21.6 million, representing an 89.8% and 105.9% increase, for the three and nine months ended September 30, 2003, respectively. The increase was primarily the result of the increase in the number of DVDs mailed to paying subscribers."

      "...coupled with a higher percentage of postage and packaging costs as a result of an increase in disc usage per average paying subscriber."

      "Marketing expense consists of marketing expenditures and other promotional activities, including revenue sharing costs, postage and packaging costs, and library amortization related to free trial periods."

      Nowhere in the 10-k does it say:

      <<"notwithstanding the rate for first-class postage increasing to $0.37 from $0.34 on June 30, 2002">>

      <<Please do some research before posting the "I think/I know">>

      I have. I know you are lying or misinformed.

    • read the 10K.

      This is the direct quote from the previous 10 and rates went up once since then.

      "notwithstanding the rate for first-class postage increasing to $0.37 from $0.34 on June 30, 2002"

      Please do some research before posting the "I think/I know"

    • Noted your post and your logic-thanks.

      Now here's mine.

      NFLX will beat earning projections 1/21/2004, and give postive news for 2004.
      NFLX will have NH 1/22/2004, with you and your pals coverage, NFLX should see the other side of $70.00 in Feb.
      The news of a 2 for 1 split in Feb. will run NFLX up even higher. This is when you should short NFLX.

    • Alert Alert!

      << Shipping alone (.39*15*2) 11.70 >>

      I don't think they are profitable at 15, but I know that they aren't paying .39 each way.

      (Large) Bulk rates, man!

    • If the movie I want is not available in Minneapolis it will be mailed direct to me from another center. No additional cost to NFLX and simply adds a day to the turnaround for me.

    • 60K to open and operate a distribution center for the first 6 months. Good luck.

      Give me a penciled number of your costs for hiring, salary, leases, equipment handling, packaging, utilities, etc.

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