The Intensifying Amazon-WalMart Price War And Jeff Bezos-Marc Lore Personal Feud Is A Huge Boon For Consumers

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Marc Lore launched Diapers.com in 2005 out of a garage. It quickly grew and by 2010 Amazon’s CEO Jeff Bezos decided that he had seen enough.

Amazon flooded the market with free diapers in 2010 and 2011. I still have free diapers from those promotions! Eventually Lore was compelled to sell his entire Quidsi operation to Amazon for $545 millon, a much lower number than he felt it was worth, due to Amazon’s relentless price war.

Lore worked for Amazon for 2 years before leaving under less than amicable circumstances.

He immediately set about creating Jet.com. The business model would be a combination of Costco and Amazon, but people balked at paying another membership fee, so he quickly removed Jet’s membership fee.

Meanwhile WalMart was tired of getting crushed by Amazon in the e-commerce space. They wanted Marc Lore to turn things around. In order to do that they wound up buying Jet.com in August 2016 for $3.3 billion and they made Lore their CEO of e-commerce.

Lore has been aggressively adding items to WalMart.com’s inventory to make them competitive with Amazon and he set about having WalMart aggressively price match Amazon.

In January 2017 he killed WalMart’s ShippingPass membership and lowered the free shipping threshold from $49 to $35. By February Amazon also lowered their free shipping threshold from $49 to $35. Of course Amazon also gives free shipping on all orders with Amazon Prime and I’m still not sure why WalMart killed the ShippingPass option. Plus Amazon gives free shipping on all subscription orders.

In March 2017 Amazon shut down the entire Quidsi/Diapers.com operation that was founded by Lore.

In April 2017 Walmart introduced pickup discount. Lore said that it cost Walmart about $5 per package delivered to someone’s home versus just 75 cents for a package delivered to a WalMart store. So he started offering a pickup discount on most items sold by WalMart that are not carried in store.

His hope was that Amazon wouldn’t bother matching an in-store pickup discount.

He was wrong.

Amazon has been aggressively matching WalMart’s pricing and passing on the in-store pickup discount in their pricing.

In turn WalMart has been matching Amazon’s matched price and Amazon lowers their price again.

For example on April 19th both Amazon and WalMart were charging $136.92 for 4 Lifetime Chairs. Then WalMart added a small pickup discount. Now there’s no way I’d go into a WalMart to pickup 4 chairs all to save a few bucks, but Amazon lowered their price by a few dollars as well.

lifetime

 

After 10 days of price drops it fell to $80.39 on Amazon and it was posted as a deal on this site on 4/29. Walmart dropped it to $80.39 before a $3.14 pickup discount, Amazon matched that at $77.25 on 4/30. Walmart dropped it to $77.25 before a $3.01 pickup discount, Amazon matched that at $74.24 yesterday morning. Walmart dropped it to $74.24 before a $2.90 pickup discount, Amazon matched that at $71.34 yesterday evening. Walmart dropped it to $71.34 before a $2.78 pickup discount, Amazon matched that at $68.56 this morning.

And just now WalMart has matched the $68.56 price before a $2.67 pickup discount. Amazon’s stock of the item is running low, but I won’t be surprised to see them drop the price to $65.89 shortly to match the WalMart pickup discount price, but with free shipping.

Update: Amazon did indeed match the $65.89 price, but now Amazon and Walmart are both sold out. However there are thousands of other items being fought over between Amazon and WalMart, for example all of the items found in this comment.

The same pattern is happening on thousands of other items. For example most of the items in this roundup have had daily price cuts thanks to the Amazon/WalMart price matching war that has been intensified by WalMart’s pickup discount.

That blurs the line between what is traditionally a deal or not. Some people complain about there being too many deals. Thanks to the price war there are more great deals than ever before, but the prices have come down incrementally, making for lots of great prices, but every day it’s only slightly lower than before, though significantly lower than when each price war begins..

Unfortunately for Mr. Lore and WalMart, Amazon still has a distinct advantage thanks to 2nd day free shipping on all orders with Amazon Prime, to which WalMart has no answer. All else being equal, I’ll buy with Amazon thanks to Prime and their superior customer service. Plus I can buy Amazon gift cards at office supply stores for 5 points per dollar 🙂

But it’s not like Amazon or WalMart are about to buy each other out and they both have very deep pockets, the only question is how low will they go?

Amazon offers free shipping with $25+ orders or get free 1 day shipping on all orders with a free trial of Amazon Prime. A prime trial is also free with Amazon Family (which also gets you up to 20% off diapers among other benefits) or Amazon Student. EBT/Medicaid Cardholders can save on Prime Membership here.

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59 Comments On "The Intensifying Amazon-WalMart Price War And Jeff Bezos-Marc Lore Personal Feud Is A Huge Boon For Consumers"

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Y

Excellent well written. Tks.

Mike

Now if only this would happen with the airlines.

Land of the free

I know this is not a political site but I must say this is why I love free markets and capitalism.

Jacob

Amazon already has matched it at $65

Moshe123

Interesting!

DrSweet

You aren’t valuing the fact that WalMart has free in-store returns on all products, even opened/used [tested] items. I spend about $150,000 at Walmart annually and return about 17% of that. I couldn’t do that with Amazon. In addition, Walmart did just switch to free 2 day shipping, though their 2-day is 3-4 compared to Amazon’s. If I’m 100% sure I’ll keep it, Amazon wins though. Great post!

Yehuda

Any chance Amazon will refund me some of the difference from when I bought the chairs at $71 to now?
Wonder if it’s worth asking for at least a credit of some sort.

Chaim

Also way easier to order from
Amazon and there app rocks ! And don’t forget about prime now
. I also love if you order prime and it doesn’t come
In time you get a free month of prime !

Anonymous

@Yehuda: sure why not try

Sam

I’m not a prime member and I choose to go with Walmart as they are giving free 2 day shipping on $35+, while amazon ships out the after a week.

Interesting

I think now one of the main advantages that Amazon has is the two day delivery even on weekends because Walmart uses UPS or FedEx which only FedEx home delivery delivers on Saturday nothing on Sunday so anytime someone to get something on weekends which is very often they have to order it on Amazon.

4yourinfo

Walmart does have one answer… as a non prime subscriber I hate ordering from Amazon for the 35.00 free shipping I am convinced they deliberately slow down your order it takes them sometimes 3 days + for the item to ship versus any other e-commerce site they are trying to force everyone into prime!

Avi

Walmart link says its out-of-stock

Interesting

@yehuda i’ve tried doing that type of thing in the past and It has not worked.

Dave

@Yehuda amazon stopped giving refunds on prices that get lowered after purchase for some reason

Avi

Amazon price is now $65.89

Zack

Meanwhile, this was just posted on vinnews
New York – Wal-Mart Files Patent For Amazon Dash Rival https://t.co/F2qrdKuELE

Moshe

So basically it sound like it is better to buy from smaller rivals of Amazon when possible. This would help ensure that no company gets big enough to take over the other one and begin raising its prices again.

Ben

One way Walmart can take on Amazon is to make it more seller friendly, compete on the fees. I got approved as a seller after 2 months of back and forth. Should not be like that.

Sam

I also use ink to buy walmart GC at cardcash for the 5%, so both are 5% off.

Amazon still has the easier site/app to navigate.

Sam

Why is it just that item?

J

Give it few more days and you will get paid to purchase this item

David

I was given a refund to match the price as a ONE time deal… 😉 chairs are still in transit!
Thanks Dan!

Sam

Amazon went up now with price.

Yitzy

Amazon has none in stock

Mark

“All else being equal, I’ll buy with Amazon thanks to Prime and their superior customer service.”

There’s another reason to choose Amazon over WalMart. With Amazon, I can opportunistically purchase Amazon gift card credit at a discount (for example buying Amazon GCs at Lowes when they were $10 off $50 last year using an Amex offer) much more often than I can purchase WalMart (or SC) GC at a discount.

Yitzy

Dan how do you think Costco feels about this war. If I’m Costco I tell a company like Lifetime either tell Amazon and Walmart to stop selling Lifetime products way below market or we will discontinue our relationship with you.

moses

@DrSweet: @Dan: Btw Walmart has free return shipping so no need to wait in line.

Eli

When these price wars start, to lock in the lowest price, simply order from Amazon and choose the slowest shipping speed (in exchange for a credit) and then as item drops cancel and reorder until it goes out of stock!

Anonymous

@Yitzy: Especially given that with Google Express Costco is also in the game now

Issue

Issue is that this kills the vendor. After a few weeks of price wars, Amazon emails the vendors stating to lower the cost, or Amazon stops selling the products. So vendors ultimately loose here.

myi

Well written, Any chance walmart is going to come back with the shipping pass like prime? (if they do that’s a killer, but then again that will take away from the in store pick up discount.) I guess they chose in store pick up over the shipping pass.

And what will be of the 2 companies in the days/years to come who knows..

rp

I prefer to shop from Walmart for the following reasons:
1. The main reason being that I do not have Prime.
2. Also Walmart offers a careplan that can be purchased for a cheap price for many items they sell. For example I purchased the Dynacraft Magna Major Damage Boy’s Bike 16-Inch (which is another item in the Walmart/Amazon price war)2 days ago and for $4 I got a careplan that covers the item for an additional 2 years.
3. In addition Walmart has an excellent customer service as well. I purchased the above item the first time for $41.35. The price went down the next day so I called for a price adjustment. In no time I got it. The next day the price went down even more. I called again and this time I asked why price was going down like this. Rep told me they try to price match with amazon. I then mentioned to her that amazon had it for even cheaper whereas Walmart only price matches that price if I were to pick up the item. That is not an option for me since I do not live near any Walmart stores. She then asked me how much amazon had it for and proceeded to price match it to that price.

myi

One advantage I do see with walmart is the price match ability which amazon revoked.

What's the end game?

Walmart has the cash and profitability to wait until Amazon cries uncle. That worries me a bit. If only Amazon had something profitable besides the Cloud. The Cloud subsidizes the rest of its businesses. Walmart uses its cash hoard. Will be interesting to see how this plays out from a business perspective in the long run. Consumers may end up gettimg screwed. A duopoly war never ends well.

Confused

How do they decide on which items to go into war? What can we expect? How can we follow up?

Mitch

FYI, as a 3rd party seller on Walmart.com, they deactivate my listings if they find it selling cheaper on another site. Just saying…

DanFan

I am currently in a price war with Amazon on a Fulfill By Amazon Products I am selling on Amazon, We are currently way below the market price, they won’t give up

Sholom

There are much more people in America who are not prime members and these people would rather shop in Wal-Mart for the free 2day shopping.

Additionally jet.com is also a great company. I use them consistently.it’s very user friendly, cheap prices, free 2 day shopping (usually next day in NYC), and it’s packaged beautifully. I really love shopping on jet.com.

Amazon is far from over, but their honeymoon period is definitely over.

What’s the end game?

@Sholom:

Although I’m an Amazon loyalist, I am coming to believe that Walmart can win this fight. Because most Americans are like you, not me.

H

The 2 day shipping is not to compare between amazon and Walmart….. Amazon wins at 2 day shipping above and beyond!!! It’s amazing!!!

moses

@Sholom: How Many Americans Are Amazon Prime Members?
A new estimate puts the number at 80 million Prime members each spending an average of $1,300 per year

https://www.fool.com/investing/2017/04/26/how-many-americans-are-amazon-prime-members.aspx

SO its definitely more than half of US families ARE prime members

Those of you who think that walmart can win the fight probably believe in Sears and Kmart stil also

Mark

@moses: “A new estimate puts the number at 80 million Prime members each spending an average of $1,300 per year”

80 million times $1,300 is $104B. Amazon’s total revenue was $136B. This means that prime members provide Amazon with more than 76% of their total revenue. That’s pretty incredible because if you subtract things like AWS and other non-retail, it means that prime is the huge bulk of Amazon’s retail business.

Anonymous

@Mark: They are indeed incredible. And thats why Amazon has a $443B market cap vs $223B for walmart even though Walmart has close to $500B in revenue

Manny

As a non prime member, Amazon waits deliberately waits before shipping orders. So if I buy a $100 item on Monday, they wait till Thursday to ship it and I get it on Sat.
Meanwhile Walmart ships out same Monday and I receive it on Wed. For now, I’ll stick with Walmart

Abe

The source article to this had two interesting facts you didn’t mentiom, but i find them fascinating.
1. Amazon prime has more than half of all US households! (Though based on the article a few comments up, 80 mil is not half)
2. Amazon has figured out how to make money even with shipping expenses, walmart claims they aren’t able to ship one item and make money off it. Interesting, but it wasnt clarified why this is the case.

Either way as you stated, we gain from this all, yay competition.

mordy

I do a lot of drop shipping in my business, and was happy to pay WM their $50 for their shipping pass. about 6 weeks later they cancelled my shipping pass account saying i am not allowed to use it for business. (but still allowed me to order and drop ship).
Then I found JET, and a month later they cancelled my entire account. I called them up and (speaking to someone in US) explained how i am drop shipping for low income ppl needing their diapers, and they re-instated me. They dropped me 2 more times, each time reinstating me with a phone call, and promising that they wouldnt do it to me again (3 months and counting). It’s sad when I can buy it cheaper from JET or WM then from my wholesale distributors. And now with google express, I have a 3rd option to purchase from. Getting ensure or depends shipped to a patient for a similar price as I pay wholesale- is a huge savings!
I do kinda wish all 3 of them would create an easy way for me to see who I shipped product to, or be able to look it up by ship to. But then again, ‘we dont want ppl using us as a distribution site’ said both JET and WM.

aradisc

Amazon just lowered their free shipping threshold to $25. DoC suggests that this is due to competition with Target.

Abe

@Dan: that’s too funny, i was sure that was the source, because so kuch of it is the same! Good for you!

Chana

My last 6 orders (at least) from Amazon Prime have NOT arrived in the 2 day promised time. When I complained, tney apologized and offered me the option to return the merchandise for no fee ???????
I’m not impressed with Amazon at the moment. Definitely willing to give the competition a try.

Zevy

@4yourinfo: …and they succeed, for a person like me that shop regularly online, the prime membership fee is a joke compared to the savings you get with their low prices, free fast shipping, prime exclusive deals, prime pantry & much more.

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