Quote:
Originally Posted by Fbone
I'm thinking Amazon is selling some below cost as they did in US before agency pricing to gain market share.
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Possible, but I'm not sure how likely.
From the publisher's point of view, they sell the books to a wholesaler or large retailer, at a discount specified by contract. If the retailers chooses to sell below cost as a "loss leader" to build traffic, that's on the retailer. The publisher has been paid. And retailers will normally sell
selected items below cost, to get traffic into the store where they can be sold other things as well at pricing that isn't a
loss leader. The retailer doesn't, as a rule, price
everything below cost.
The risk from what you propose is what happens once Amazon thinks it
has the market share. Do they suddenly jack up prices all around to make money? Low ball pricing is a good way to
gain market share, but having gained it, you must
keep it. Amazon is customer-centric. I don't see them being enthusiastic about pissing off customers by getting them accustomed to a low price then raising it on them. That's
not the way you
retain customers.
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Dennis