Amazon Declares War !

Shelf Awareness

In Price War, Amazon Discounts Go Deeper Than Ever

Yesterday Amazon.com quietly began discounting many bestselling hardcover titles between 50% and 65%, levels we've never seen in the history of Amazon or in the bricks-and-mortar price wars of the past. The books are from a range of major publishers and include, for example, Inferno by Dan Brown, which has a list price of $29.95 but is available on Amazon for $11.65, a 61% discount; And the Mountains Echoed by Khaled Hosseini, listed for $28.95, offered at $12.04, a 58% discount; Lean In by Sheryl Sandberg, listed at $24.95, available for $9.09, a 64% discount; and The Fault in Our Stars by John Green, listed at $17.99, available for $6.55, 64% off. A notable exception is The Cuckoo's Calling by J.K. Rowling, using the pseudonym Robert Galbraith, which is discounted 42%.
The changes appear largely to be in response to an Overstock.com campaign launched this week to be 10% lower than Amazon's on "the roughly 360,000 books sold on both Overstock.com and Amazon.com," according to Internet Retailer. Overstock has said the anti-Amazon campaign will last indefinitely although its site says "one week only."

The discounts are, of course, far higher than the usual 40%-50% range offered by Amazon, warehouse clubs and other discounters--including Overstock--and are more typical for remainders than frontlist hardcovers. In some cases, the hardcovers are priced below the Kindle editions.
Some have speculated that Amazon is also emboldened to engage in dramatic price cutting--which hurts traditional bricks-and-mortar stores and feeds consumer perception that a fair book price is lower than its cost--by the Justice Department's victory against five major publishers in the e-book agency model case as well as Wall Street's acceptance of continued losses by Amazon for now in the expectation of retail domination--and major profits--eventually. This last point was seen most recently on Thursday, when Amazon's quarterly results included a net loss and were below Wall Street expectations but did not provoke the usual rush to sell, as is the case with most companies whose results are disappointing.

Another possible reason for Amazon's boldness is its apparently cozy relationship with the Obama administration--whose Justice Department pursued the agency model case, which mainly benefited Amazon. This relationship will be highlighted this coming Tuesday, when the president will give another major speech on the economy and aiding the middle class at, of all places, the Amazon warehouse in Chattanooga, Tenn. This is roughly equivalent of going to a Wal-Mart and calling for more of the kinds of jobs it offers. --John Mutter