Amazon and Wal-Mart Price War: Good or Bad For Book Consumers?

For the last couple of weeks, Amazon and Wal-Mart have been at war online. The megastores are heavily discounting highly anticipated book releases and causing a windstorm among publishers and other opponents who see the business tactics as disastrous on an already fragile industry.

Currently, Wal-Mart has priced its "Top 50 Preorders" of titles like Sarah Palin's Going Rogue [1] and James Patterson's I, Alex Cross at $8.98 whereas Amazon is selling those titles for $9.00. And according to the Wall Street Journal [2], these two brilliant giants are selling the books at a loss.

The price war comes off as a "who's got the biggest discount" contest rather than a strategy to offer savings to customers. Perhaps that's why Target and Sears joined the battle [3]. No one wants to look like they have a small, you know, discount.

But what about the consumer? Sure, the immediate savings of snatching a new hardcover for nine bucks when it usually retails for more than twenty dollars sounds good now. But are there long-term implications for the book industry and independent bookstores that can't possibly slash prices so low? Many indies have closed citing reasons of bleak economic climate and increased competition by megastores and online sellers. Will consumers become spoiled by these deals and expect lower prices on all books? Will it only be a matter of time before Wal-Mart and Amazon, who don't exclusively sell books, expect publishers to carry the discounts on their backs?

James Surowiecki writes inThe New Yorker [4]:

"Outraged book publishers and booksellers are making exaggerated claims about how the discounts will devalue books and wreck the industry. But they're right about one thing. The real competition in this price war is not between Wal-Mart and Amazon but between those behemoths and everyone else-and the damage everyone else is incurring is deliberate, not collateral. Wal-Mart and Amazon have figured out how to fight a price war and win: make sure someone else takes the blows."

Barbara Meade, co-founder of Washington, DC-based independent bookstore Politics and Prose made an interesting point [5]: "It's a totally different market. If Wal-Mart started selling pork chops for $1.79 a pound, they're not going to put Whole Foods out of business. There is plenty of room for everyone."

But in war, there's always a loser. The question is: who will that be?

alexcross.jpg [6]