Amazon is selling toys cheaper than Walmart online this holiday season, with its average price (excluding Marketplace sellers) on a basket of 87 toys 3% lower than Walmart's on average, according to Bloomberg.
And Walmart is once again beating its major brick and mortar competitors, with prices on the basket of toys that are 2.4% lower than Target, 5% less than Sears, and 7.2% lower than Toys R Us, according to the report.
This is a similar ranking on price to the 2012 holiday season (see "Amazon Winning Toy Price War").
Amazon, of course, has an advantage over its competitors in that it doesn’t seem to have to make a profit on its own sales as long as it makes money on its Marketplace and Amazon Web Services, and its stockholders are forgiving. Amazon lost 2.6% of sales on all of its non-prime Direct Retail business last year, and 10% of sales on Amazon Prime (see "Why Amazon Wins on Price").
Two Amazon pricing changes outside of its prices on the specific toys will have at least some impact this holiday season. One is that Amazon is charging sales tax in more and more jurisdictions as it expands its network of distribution centers, a change that does have an impact on its competitiveness on price and on sales vs. its competitors (see "Sales Tax Matters"). Amazon also raised its threshold for free freight for non-Prime customers from $25 to $35 in October, making it more difficult to avoid freight charges on small orders.
Although Amazon Prices Going Up
Posted by ICv2 on November 18, 2013 @ 2:44 pm CT
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