Amazon's Price War

The President is coming to my home town on Tuesday to speak at a new Amazon fulfillment plant about the middle class. I expect his speech will be akin to what he has been saying this week, what he calls “a better bargain for the middle class.” He told a Knox College audience:

I’ll lay out my ideas for how we build on the cornerstones of what it means to be middle class in America, and what it takes to work your way into the middle class in America: Job security, with good wages and durable industries. A good education. A home to call your own. Affordable health care when you get sick. A secure retirement even if you’re not rich. Reducing poverty. Reducing inequality. Growing opportunity. That’s what we need.

John Mutter suggests Amazon has a close relationship with the Obama administration, which may be the reason the president is speaking there, may be the reason they are upping the ante in their price war with bookstores. Yesterday, Amazon discounted several bestsellers even more than usual, 50-60% off retail, which industry insiders consider a declaration of war against offline booksellers. This may be the result of what Mutter says was a favorable resolution to the e-book case before courts this month. Amazon won out, when Apple’s efforts to change the model for releasing and pricing e-books failed.

Some people continued to worry that Amazon will price booksellers out of business, and so offline browsing and friendly recommendations will be go the way of the buggy cart. But I doubt that.

llibreria - bookstore - Amsterdam - HDR

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