In a heavyweight battle of brick and mortar superstores and internet super-sites, Amazon and Wal-Mart are squaring off to see who is the biggest, baddest bookseller in the land.

Wal-Mart is approaching Amazon the turf of the net, selling through its Web site. This is a battle that has been brewing for a long time, as Jeff Bezos tries to build the world’s bigger retailer on line and the heirs of Sam Walton attempt to extend their humongous brick and mortar retail empire onto the internet. The latest battlefield in the war is the home territory of Amazon.com, books. Wal-Mart has fired the opening shots in what could be the most interesting battle yet.

Wal-Mart’s strategy is clearly based upon price. The Arkansas-based retailer announce Thursday that it would sell a list of ten books, all virtually guaranteed to be best sellers, for $10 each, according to a CNET story. These books include Stephen King’s new book “Under the Dome” and the upcoming book by politician Sarah Palin. Just after this announcement, Amazon matched the Wal-Mart $10 price. Wal-Mart immediately reduced the prices of those selected books to $9, a move that was matched almost immediately by Amazon.

This battle has been brewing for some time. At one point, Wal-Mart decided to sell all books on the New York Times best-sellers list for 50 percent of their cover price. Since that 50 percent is exactly the traditional profit made by booksellers on the price of a book, that move was (and is) seen as a move by Wal-Mart to drive all booksellers, including Amazon, out of the marketplace. A Wall Street Journal story makes the following observation: “Retailers traditionally pay half the list price for a hardcover book. Assuming that’s the case with Wal-Mart, its $10 sale price on ‘Under the Dome’ represents a 71 percent discount of the $35 cover price, which suggests the discounter will lose $7 to $7.50 on every copy it sells.”

A company the size of Wal-Mart would be able to accept those sorts of losses in the long term in order to gain a virtual monopoly on the book selling business. Most retailers would be unable to compete and would be forced to retire from the field of battle. The publishing industry in general is already in significant turmoil and that turmoil is affecting all parts of the chain between writers and readers, inclusive. This latest bid by Wal-Mart to become the largest online and offline bookseller is an significant part of the recent changes in the publishing industry, and may not be a good sign as to the outcome.

Related:

Entry was posted on Saturday, October 17th, 2009 at 12:40 pm under Amazon, Ecommerce, Internet, business.

Read more entries by Michael W. Jones.
Stumble It!