Quote:
Originally Posted by Andrew H.
This is not a question that is always avoided. This is a question that is always brought up. And the fact is that low price retailers that get a dominant position in an area through low prices don't jack up their prices. They just don't. Wal-mart didn't. Borders and B&N didn't. Best Buy didn't...and neither did any of the other Big Box retailers. And Amazon won't either, for at least three reasons: (1) there is always some competition; (2) books are a leisure activity, and people can always choose to do another activity if this one is too expensive; and (3) raising prices invites more competition, and the barriers to entry for an online retailer aren't that high.
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Borders went out of business.
B&N is in a critical financial position.
Best Buy is having serious financial issues and closing stores with layoffs.
They may not have raised prices because they weren't in a dominant position or they should have raised prices to take advantage of their dominance.
Walmart does have some competition (Kmart, Target, dollar stores) which may keep prices stable. However, instead of raising prices they demand further wholesale discounts further stabilizing retail prices.