Amazon, Walmart.com, Target.com in price war over book

Walmart.com dropped price from list price of $28.99 to $10, then to $9 and below as other retailers matched it. On October 15, Walmart.com began offering preorders of Going Rogue, along with nine other new book releases, for $10. After Amazon.com reportedly matched the price, Walmart.com “str[uck] back, slashing its prices to $9” [AOL Daily Finance, 10/16/09]. Amazon also dropped its price to $9 [Buzzflash.com, 10/19/09]. Target.com joined in the price war, prompting Walmart.com to drop its price further [The New Yorker, 11/9/09]. By November 5, Walmart.com was selling the book for $8.98, Target.com was selling it for $8.99, and Amazon was selling it for $9. The respective retailers were still selling the book at those prices as of November 16. All three retailers give the book's list price as $28.99. Screen shots of the November 5 prices are below:

Newsmax offering book for $4.97, or free, as promotion for magazine

Newsmax ties book offer to its magazine. As early as October 2, according to a Newsmax email sent to its mailing list, the right-wing website offered Going Rogue for $8.95 along with four free issues of Newsmax magazine, a price later dropped to $4.97. The offer links to a page on the Newsmax website explaining that there is a $5.95 shipping and handling charge for the book, and if the subscriber fails to cancel the magazine after the free subscription runs out, the “subscription will renew automatically at the low annual price of $39.95 by charging [your] credit card or [your] checking account.” Newsmax also offered Going Rogue for free with the purchase of a $49.95 one-year subscription to Newsmax magazine. Additionally, Newsmax has promoted its Going Rogue deal in commercials on Fox News. From a Newsmax commercial appearing during the November 5 edition of Fox News' The Live Desk:

ANNOUNCER: Sarah Palin has electrified America. Her new book, Going Rogue, is already a runaway best-seller, and it's not even in stores yet. Now, Newsmax.com has an incredible offer for you. You can receive Sarah Palin's new book for just $4.97, a savings of $24 off the cover price. Plus, you'll get four months of the award-winning Newsmax magazine absolutely free. This special offer won't last, so call 800-NEWSMAX today.

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]