Amazon.com and Wal-Mart are engaged in all out war: a book price war. Wal-Mart is determined to steal Amazon.com's business and so has lowered prices on new hardcovers. Amazon.com then matches Wal-Mart's price. Sarah Palin's new book, Going Rogue was marked down to a ridiculously low price of $9 by Wal-Mart. Amazon.com followed suit.
Wal-Mart triggered the online skirmish Thursday when it began selling its 10 most anticipated hardcovers for $10 apiece when pre-ordered on its Web site. Amazon matched the offer hours later and Wal-Mart then chopped its price to $9. Friday morning Amazon had matched the price.
"I'm worried about the major book-selling chains, and I'm concerned about the implications for publishers and the public alike," saidDavid Young, chief executive of Lagardere SCA's Hachette Book Group, one of the country's largest book publishers. He and other publishers said they feared the online pricing could hurt small independent book sellers and big retail chains.
A Walmart.com spokesman said Friday that the discount giant was prepared to make further cuts. The retailer's Web site will continue to adjust its prices, spokesman Ravi Jariwala said in an email, "so that Walmart.com offers the lowest online prices." Late Friday afternoon, it dropped its price a penny, to $8.99.
Walmart.com CEO Raul Vazquez said in an interview Thursday that the retailer "will go as low as we need to" to underscore Walmart.com's intent to be a low-price leader online. The retailer this month has sought to expand its Web presence, creating an Amazon-like online marketplace for other retailers and offering home delivery for purchases such as shampoo and diapers.
The major publishers and retail chains are quite upset. A spokesman for Hachette said that when major retailers are allowed to sell below cost, the price deflation destabilizes the market. He noted that in France it is actually illegal to sell books below cost. When publishers don't make enough money, they start cutting mid-list authors and won't promote new authors, which means there will be fewer books to choose from. But it's not just price wars on hardcovers that are hurting the book industry. The lower price of ebooks is also cutting into profit margins.
As for independent bookstores, you may have noticed that are becoming more and more rare. Soon, they won't exist at all. No one will buy a new Stephen King novel for $35 (full price) when she can buy it from Amazon.com or Wal-Mart for $9 -- especially in this economy.
