We believe that Amazon will win the e-commerce battle recently escalated when Walmart opened up its website to third-party sellers because Amazon knows e-commerce better, focuses 100% on it (versus Walmart, which makes most of its money from its brick and mortar store), and offers additional features like fulfillment and preferred seller incentives.
Ultimately the losers will likely be smaller e-commerce sites that can’t withstand a prolonged period of discounted prices.
The war heated up recently when both sides lowered prices on similar items in order to undercut the other. Both sides have plenty of profit and cash to weather a long price war so we’ll be monitoring it here and updating as developments occur. Here is how the two sides have squared off to-date. Check back for updates.
- November 23, 2009: TBI Research analysis indicates 9 of the top 25 books on the New York Times bestseller list are priced one penny cheaper at WalMart.com versus Amazon, with neither making much money on any of the top 25 since prices are so low.
- November 6, 2009: Walmart cuts the prices of 10 hot DVDs to $10, which is below the wholesale price paid for them. Amazon matches the price within hours. Walmart then cuts its price again to $9.99. DVDs include hot items like Star Trek and Harry Potter.
- October 15, 2009: Walmart cuts the price of 10 new books to $10, which Amazon immediately countered. Walmart follows by cutting its price to $9. Titles include Stephen King’s “Under The Dome,” and Sarah Palin’s “Going Rogue.”
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