Overstock to Amazon: "If they go to 10 cents, I'll go to 9 cents"

[fjtorres]

Originally Posted by speakingtohe

Some people are only happy with what they have got if others are far worse of. I don't think fjtorres is one of them. He is trying to stay away from political debate as it is against the forum rules except in the designated forum. I am sure he would dearly love to engage more heatedly in this discussion as perhaps would I, but not enough to ignore the rules.

Helen

Thanks for the vote of confidence.
And you are correct that I don't think the law of unintended consequences' effects on social issues has much to do with pbook price wars.

[charmian]

Overstock entering the ebook market? That seems like a very strange idea. How would they do that? Undercut Amazon's ebook prices?

[meeera]

Originally Posted by holymadness

You don't seem to have understood what an opportunity cost is. Let's say you spend 8-12 hours per week clipping coupons for a total savings of $50-$70. Your effective hourly wage for that time spent is between $4.16 and $8.75 an hour.

Right. And...

That is unambiguously a waste of time from the perspective of economic efficiency. Better to get a part-time job, or to upgrade your education to aim for a promotion, or to learn a revenue-generating or -saving skill (such as woodworking, canning, sewing, &c.).

$ Childcare: $10-15/hour per child
$ Buying and maintaining work clothing and shoes
$ Transport to and from work and childcare, for self and children
And this is all assuming that (a) work is readily available for you in your area, and (b) you don't have a disability that means that very few will consider employing you, or that means you are unable to hold a fixed-hours job.

Have you really added this up properly? Are you sure your didactic and "unambiguous" conclusion applies to everyone you're lecturing?

[HarryT]

Moderator Notice
Please stick to the topic of this thread. You are welcome to start a thread in the "Politics and Religion" forum if you want to talk about economics.

Thank you.

[fjtorres]

Originally Posted by charmian

Overstock entering the ebook market? That seems like a very strange idea. How would they do that? Undercut Amazon's ebook prices?

The how is trivial: they can contract with any of several "white label" ebookstore service providers (Bluefire, Txtr, Overdrive) to setup a generic ADEPT ebookstore under their name. It's being done here and there.

They can also make a deal with Kobo like the one Borders had where they set up a clone of the Kobo website labelled Overdrive that runs off the Kobo back end.

Selling ebooks is easy these days.
Selling *lots* of ebooks? Less easy.

As for undercutting Amazon's prices, they could.
It's not as if Amazon discounts *every* book.
All they need is to undercut them on a few dozen high visibility books every week to establish their price-cutting street cred.

Now, I doubt Overstock has the pockets for it, but if they did, they could buy Nook and try to be Amazon-lite, selling books, ebooks, and dry goods.

Mostly I think the price war is a very clever and cost-efficient publicity campaign but there might be further moves ahead. And, honestly, the kind of thinking behind this publiciity campaign is the kind of thinking ebook selling needs to keep Amazon honest.

for Overstock.

[Barcey]

Originally Posted by fjtorres

Getting back to Overstock vs Amazon, people tend to overeact to price wars.
Those wars rarely reset the pricing expectations of the targetted market.

Though it *has* happened.
(The eink four hour price war of 2010 comes to mind. But that was more of a pivot in pricing models towards subsidized hardware, anyway.)

Me, I'm keeping an eye on overstock: this "challenge" to Amazon might be a prelude to enter the ebook business.

I don't know. If they intend to sell e-books they've picked the wrong name to build the brand around. It's kind of hard to be overstocked on e-books.

[fjtorres]

Originally Posted by Barcey

I don't know. If they intend to sell e-books they've picked the wrong name to build the brand around. It's kind of hard to be overstocked on e-books.

Corporate names are odd.
Overstock at least carries the connotation of abundant and cheap.

One prominent ebook vendor named themselves after fierce female warriors that practiced partial mastectomies to improve their archery.
Another named itself after a religious symbol of sin.
Yet another named themselves after dry mud.

To each their own.
(Do note that all three of the above actually fit their corporate cutures.)

[charmian]

fjtorres: It would be a very good thing for consumers if Overstock did aggressively challenge Amazon on prices in ebooks. (If they succeed at it though, I wonder how the publishers would react)

Overstock buying Nook would be interesting, especially if they did then ally with Kobo.

[fjtorres]

Originally Posted by charmian

fjtorres: It would be a very good thing for consumers if Overstock did aggressively challenge Amazon on prices in ebooks. (If they succeed at it though, I wonder how the publishers would react)

Overstock buying Nook would be interesting, especially if they did then ally with Kobo.

I dunno; if they could afford to buy Nook they wouldn't have much need to partner with Kobo. Conversely, partnering with Kobo would yield lower profits but cost a whole lot less so I think the two are mutually exclusive.

Of the two, I think the latter more likely: Kobo is doing very well outside the US but sooner or later they need to step up their visibility in the US. BAM would be a good partner but they're already signed up with Nook, which doesn't leave them too many options.

[Fbone]

Originally Posted by fjtorres

As for undercutting Amazon's prices, they could.
It's not as if Amazon discounts *every* book.
All they need is to undercut them on a few dozen high visibility books every week to establish their price-cutting street cred.

And within minutes Amazon would price match either automatically or by the legion of Amazon customers that would notify them by using the "lower price" link.

[fjtorres]

Originally Posted by Fbone

And within minutes Amazon would price match either automatically or by the legion of Amazon customers that would notify them by using the "lower price" link.

That is the theory, but Amazon price matching is discretionary and not automatic.
Plus, it takes time to kick in.
More, pre-conspiracy it was common to find cheaper prices all over. That is why the price tracking websites came to be.
BPH talking points aside, Amazon did not have lower prices on every ebook, they were "merely" cheaper in the aggregate. Compelling to many but not insurmountable.

It *is* possible to compete on price with Amazon. If you know what you're doing.

[speakingtohe]

Originally Posted by charmian

fjtorres: It would be a very good thing for consumers if Overstock did aggressively challenge Amazon on prices in ebooks. (If they succeed at it though, I wonder how the publishers would react)

Overstock buying Nook would be interesting, especially if they did then ally with Kobo.

It is a two edged sword I think.

Products becoming cheaper because of manufacturing improvements or more sales allowing the seller to cut their profits are good for consumers, except for those who lose their jobs due to manufacturing improvements.

Price wars I am not so sure of as being beneficial. The two giants clash, and will probably level off, but the little guys who really can't afford to slash their profit margins and eat are caught in the undertow. Dragged down and out of business. Then there are more people out of work, and sometimes a downturn of the economy in general. All this to save a dollar or two on a book.

Helen

[elemenoP]

Originally Posted by charmian

fjtorres: It would be a very good thing for consumers if Overstock did aggressively challenge Amazon on prices in ebooks. (If they succeed at it though, I wonder how the publishers would react)

Overstock buying Nook would be interesting, especially if they did then ally with Kobo.

Something has become muddled in this thread (gee, how did that happen?). Overstock does not sell ebooks. To our knowledge, they have no plans to sell ebooks. I do not believe they sell any digital content (that isn't shipped on physical media, that is). The original topic of this thread was a price war on PHYSICAL BOOKS.

eP

[Fbone]

Originally Posted by fjtorres

It *is* possible to compete on price with Amazon. If you know what you're doing.

It is possible but you risk putting yourself out of business. Kobo and Sony are trying by offering discount codes which can't be price matched. Of course, we're talking epubs. For Kindle owners it's a different story as no one can compete with Amazon for DRM ebooks. If publishers and authors removed DRM then we may see more competition.

[speakingtohe]

Originally Posted by Fbone

It is possible but you risk putting yourself out of business. Kobo and Sony are trying by offering discount codes which can't be price matched. Of course, we're talking epubs. For Kindle owners it's a different story as no one can compete with Amazon for DRM ebooks. If publishers and authors removed DRM then we may see more competition.

Maybe Apples and Oranges, but is not selling an ereader for $40 competing with Amazon in a sense.

Amazon has a big ebook customer base and likely to keep the larger part of it for the next few years. Why change if you read less than a book a month?

For those who read a book or more a week it only makes sense to get a second reader or read some books on a tablet.

Helen