Declaring War On Amazon
By Rex Moore (TMF Orangeblood)
June 25, 2002
Book lovers rejoice... for a limited time only. Privately held Buy.com -- known primarily as a good place to buy computers and electronics online -- is promising to beat Amazon.com's (Nasdaq: AMZN) book prices by 10%. In addition, Buy.com is offering free shipping on books and other selected items, just after Amazon said it would ship free on orders over $49 (down from $99).
Amazon is far bigger and much more able to withstand a price war, but this will be a pain in the pocketbook for CEO Jeff Bezos and company nonetheless. In an email to customers announcing the $49 deal, Bezos said the trial would "be very expensive for us," but hoped to "generate enough new business to offset the cost."
If it's expensive for Amazon, you can bet Buy.com feels the pain even more. But founder Scott Blum, who took the company private less than two years after its IPO, told The Wall Street Journal that as long as Buy.com is modestly profitable he'll be able to offer the discounts. Still, this whole thing is uncomfortably reminiscent of the dot-com "go-go" days when companies literally gave up the store to grab market share. And if Buy.com has to ship too many $7 orders for free, it won't be long before it burns its book offer and returns to a more sane policy.
By the way, last week in The Motley Fool Take we screwed up and called Buy.com a public company. Doh! Blum bought the company back last November. Our apologies.
RSS Headlines
Fool UK
