Loss Leader?

Discussion in 'Politics & Religion' started by OPTIONAL777, Nov 17, 2009.

  1. <img src=http://cloudfront.mediamatters.org/static/images/item/palinbook-amazon-20091105.jpg>
  2. Book reportedly being sold below cost:

    Selling below cost is part of "loss-leader" strategy. AOL Daily Finance reported that "Publishers ordinarily offer current titles to retailers at a discount of between 40% and 50%. A bookstore spends up to $12.50 to sell a $25 hardcover, which it buys directly from the publisher or through distributors like Ingram or Baker & Taylor" [AOL Daily Finance, 11/4/09]. As a result of the current online price war, The New Yorker stated, "Amazon and Wal-Mart are surely losing money every time they sell one of the discounted titles. The more they sell, the less they make." The New Yorker continued:

    Amazon and Wal-Mart hardly seem reckless, though. So why did they go to war? The answer is that they didn't, really. Sure, Wal-Mart is making a statement that it's a player in the online world, but the real goal of this conflict isn't to lure readers away from Amazon, and it isn't to get people to buy one of those ten books. It's to lure them online, away from big booksellers and other retailers, and then sell them other stuff. Usually, price wars wreak havoc because they erode the pricing power of an entire business. But, because this price war involves just ten items, its impact on revenue will be small, and outweighed by the positive effects of all the publicity. (It has garnered publicity because it involves books. A big banana price war has been raging in Britain, but you probably haven't heard about it.) It's textbook loss-leader economics. [The New Yorker, 11/9/09]
  3. dsq


    toilet paper is much cheaper and least it doesnt come with smeared shit...palin the quitter...a joke