• Home
  • Personal Finance
  • Investing
  • Business
  • Career
  • Consumer
  • Debt
  • Lifestyle
  • Retirement
  • Taxes

Personal Finance News

Latest News About Personal Finance

  • Blogger Net Worths
  • Top Personal Finance Blogs
  • Blogroll

Amazon and Walmart Are in an All-Out Price War

March 30, 2017 Leave a Comment

Two giant retail companies are battling in an all-out price war and that’s a good news to customers. For years, Walmart had dominated the retail landscape on the back of its “Everyday Low Price” guarantee. But now, Walmart was too often getting beaten on price. An article on Recode reported:

The result in recent months has been a high-stakes race to the bottom between Walmart and Amazon that seems great for shoppers, but has consumer packaged goods brands feeling the pressure.

The pricing crackdown also comes in the wake of Walmart’s $3 billion acquisition of Jet.com and its CEO Marc Lore. Lore now runs Walmart.com and has said one of his mandates is to create new ways for the retailer to beat everyone else on price, including Amazon.

One piece of the battle, executives say, is an Amazon algorithm that works to match or beat prices from other websites and stores. Former Amazon employees say it finds the lowest price per unit or per ounce for a given product — even if it’s in a huge bulk-size pack at Costco — and applies it across the same type of good on Amazon, even when the pack size is much smaller.

So let’s imagine Costco is selling a pack of 10 bags of Doritos for $10 — or $1 per bag. Amazon’s algorithm notes that one bag is $1 at Costco and, in turn, lowers the price on Amazon of a single bag of Doritos to $1.

That is a great deal for customers — something that is likely driving the decision at Amazon, where an obsession with customer value dominates its strategy.

Walmart wants to have the lowest price on 80 percent of its sales, and Amazon is willing to lose money for some period of time on a product it feels it has to have. While the two titans fight each other, customers everywhere benefit from the low prices.

Hopefully, both giant retailers thrive in this price war to the benefits of consumers. Amazon is well know for its ruthless tactics. For instance, it had driven down the prices so low by discounting most pop music titles by 35 percent to drive Virgin Records, HMV and Tower Records out of business. Afterward, Amazon jacked up the prices after the competitors went out of business. Hence, in this price war between the titans, it’s in the best consumers’ interest for both online and brick-and-mortar retailers to succeed.

Related

Leave a Comment Cancel reply

Must Read

  • What's the Recommended Temperature for Vacant Home in Winter?
  • How to Reach a Live Person at IRS to Resolve Tax Problems
  • How to Refinance a Paid Off Car
  • The Best Day of the Week to Buy Mutual Funds
  • Professional Panda Cuddler as the World's Best Job for $32,000 per Year
  • Two-Thirds of Americans Live Paycheck to Paycheck
  • 61% Now Living Paycheck to Paycheck
  • Lost Passwords Lock Millionaires Out of Their Bitcoin Fortunes
  • Half of Americans Are Just One Paycheck Away From Financial Disaster
  • Amazon Cash: Now You Can Pay With Cash on Amazon

Recent Posts

  • More Americans Are Using ‘Buy Now, Pay Later’ Services To Pay for Groceries
  • 5 Tips To Get The Best Value On An Insurance Policy
  • 61% Now Living Paycheck to Paycheck
  • 36% Earning $100,000 or More Living Paycheck to Paycheck
  • Two-Thirds of Americans Live Paycheck to Paycheck
  • The Hit to Your Pocketbook From Higher Gasoline Prices: $2,000 a Year
  • Uber Now Lets You See How Many One-Star Ratings You Received From Drivers
  • Survey: 7 In 10 Americans Living Paycheck To Paycheck

Connect With Us

  • Facebook
  • Twitter
Home · About · Terms · Privacy · Contact · Copyright © 2023 · Personal Finance News