Quote:
Originally Posted by HoraceWimp
Standard retail pricing generally endeavours to put a product in front of a customer at a competitive price with their competitors.
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No.
Not always.
There are other strategies.
Where Amazon seems to be confounding a lot of people is that they are not running their company to maximize *present* revenue but rather to maximize *future* revenue. They are running a tech industry-standard growth-based strategy where you leverage your first-mover advantage in a virgin field to grow as big as possible as quickly as possible *before* any competitors can emerge.
And that last point is key; Amazon is *not* competing against B&M bookstores or even B&N. They are competing against eBay and against Rakuten and against Walmart.com. And against physical shopping mall operators. B&N and the bookstores are just collateral damage.
What so many people see as "predatory" practices is nothing of the sort. What it is is the unfortunate reality that Amazon can sell the exact same prducts to the exact same customers for a lot lower operational cost than the B&M retailers and they can sell *more* products than the B&M guys to those same customers and, even more importantly, they can sell that bigger catalog to people the B&M guys can't reach at all.
They are more efficient *and* have a bigger reach because they are paying to a broader audience.
To paraphrase Lois MacMaster Bujold about one of her characters; "Amazon is running a get rich *big* play, not a get rich *quick* play."
The only way to counter that strategy is to meet them on the same turf-- using the same tools: logistics, automation, customer srvice, advanced tech, and a heavy online component--or, conversely, get the heck out of their way and find a business model that caters to the peope Amazon can't appeal to.