ÃO PAULO, Brazil — The story is not very romantic, Murillo Tavares warns. No starry-eyed 20-somethings, fresh out of local universities, with little money but big ideas.

Instead, for Submarino — an Internet retailer loosely considered the Amazon.com of Brazil — the prevailing philosophy, for the most part, has been caution. While most of Brazil's Internet start-ups followed their northern neighbors into spectacular bankruptcy, Submarino — which is privately held by a group of local and international investors, including the American firms Warburg Pincus and TH Lee.Putnam Internet Partners — says it should break even in the next few months, two years after its founding.

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Mr. Tavares, Submarino's managing director, likes to point out that it took Amazon .com seven years to break even. "Unlike Amazon.com, we never had enough money to make huge mistakes," Mr. Tavares said, grinning.

The story began about three years ago, when Mr. Tavares was a 32-year-old executive at a local investment group called GP Investimentos, which has $1 billion in investment assets. After an extensive market study, the company decided to set aside part of a venture capital fund for a consumer-oriented Internet investment, and rather than give the money to others, Mr. Tavares and four partners decided to take on the project themselves.

To start, they bought a fledgling Internet bookseller called BookNet, and four months later, Submarino was born, the name itself selected through focus groups. (Besides having desirable associations with the sea, "submarino" is the same word in Spanish and Portuguese and is even recognizable to English speakers.)

"If we had it to do over again, we would have picked a name that starts with A," Mr. Tavares said. "The Internet is highly alphabetical, and we're always last on the list."

And there were other missteps, too.

With $14 million in the coffers from a first round of private investment in 1999, Submarino opened for business simultaneously in Brazil, Argentina, Mexico and Spain, initially selling only books and CD's but with the intention of becoming the leading online retail destination for a whole range of products in the Spanish- and Portuguese-speaking world. It rented prime office space and, in a familiar touch, bought pinball machines for the São Paulo headquarters.

But Internet sales never gained popularity in retail-saturated Southern Europe, forcing the company to sell out to the French retailer Carrefour. In Argentina, persistent recession closed down that operation in May 2001. By the time the television giant Grupo Televisa offered to buy Submarino's Mexico operations, the partners had decided to pull back from their international aspirations — including a service for Hispanics in the United States that had been on the drawing board — and focus on keeping the Brazilian Submarino from running aground.

Submarino cut about 20 percent of its staff, down to about 265 people, and moved out of offices in São Paulo's pricey Vila Olympia neighborhood (briefly known as Brazil's Silicon Alley) to set up shop in quarters attached to their newly built warehouse in the industrial neighborhood of Barra Funda.

After raising another $20 million from existing backers in February 2001, they turned all their energies toward breaking even.

Acknowledging that Brazil's Internet user population is small and likely to remain that way for some time, the company has focused on courting existing customers with high quality service. Now the largest parcel client of the Brazilian postal service, Submarino has had an overnight delivery service developed especially for the company, processed, to save time, out of a three-man post office that has been set up inside the Submarino warehouse.

The company guarantees delivery within 24 hours in the State of São Paulo and two days to surrounding states, but may take up to five days to reach the farthest points in the country. More than 70 percent of Submarino's revenue — $33 million last year from 560,000 orders — now comes from sales to repeat customers.

"I always check Submarino first because they usually have the best price and the fastest delivery," said Cacilda Camargo, 45, who usually buys books and CD's on Submarino, but whose last purchase was an iron. "I would have bought my washing machine there, but at the time I was looking, they weren't selling them yet."

As consumers in Brazil grow familiar with e-commerce, the company has increased its variety and stock of items, now carrying 65,000 different products, including DVD's, toys, electronics, refrigerators and other major appliances. Compared with offerings from Amazon.com, which has tens of millions of items in stock, Submarino's list seems small, but it surpasses most brick-and-mortar retailers in Brazil.

The growing stock is one of the reasons why Submarino is responsible for 56 percent of online sales in Brazil in the category that includes books, music, videos and DVD's, and 26 percent of consumer electronics, according to a study by the Boston Consulting Group. The trick now is to bring new consumers in, and keep them buying.

Cultivating new customers means overcoming resistance to placing orders online, based on concern about sending credit card or bank account information over the Internet.

"The trouble with e-commerce is that the perception of risk is much bigger than the risk itself," said Alexandre Magalhães, an Internet analyst at the audience measurement firm Ibope eRatings. "Consumers usually start slow, with a book or CD, and as they grow more comfortable, they buy bigger and more often."

And being compared with Amazon.com, which competes with Submarino among wealthy Brazilians who often speak English, can be a double-edged sword, said Mr. Tavares, who found out recently that he was in the same graduating class at M.I.T.'s Sloan School of Business as Jeffrey Wilke, Amazon's senior vice president of operations; the two have not yet met. While the company can look north for ideas, so can investors and consumers.

"My investors ask me `Why can't I have a personalized home page, like on Amazon?' " he said. "But my base of clients and their number of purchases is so small that it's not even statistically significant yet. I'd wind up spending a lot of money, and still offering the wrong things to the consumer."