Amazon.com (NASDAQ: AMZN) reported earnings yesterday that showed the e-commerce giant is just barely eking out a living, with an operating profit margin of 0.5% (and a negative net). And now, Overstock.com (NASDAQ:OSTK) has announced a plan that might squeeze Amazon's profit margin even further.
Overstock declared yesterday that for at least "a limited time," it intends to sell books to its online customers at prices "at least 10-percent below" what Amazon charges. As Overstock explains, it's chopping the prices on literally hundreds of thousands of titles.
Of course, Amazon shoppers may still find they get a better deal on eligible purchases of $25 or more (which get free shipping) or Kindle e-book purchases. On the other hand, Overstock points out that truly avid readers can avoid its shipping charges as well so long as they order more than $50 worth of merchandise. Shipping on orders under that amount is $2.95 per order.
As Overstock CEO Patrick Byrne noted: "If you're going to buy a book this week, you're crazy not to shop Overstock.com first. And if you weren't going to buy a book this week, you should reconsider."
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.