Amazon (NASDAQ:AMZN) will not wait until the day after Thanksgiving to begin its holiday sales. It wants to take whatever early shopping business it can get from Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Best Buy (NYSE:BBY) now.
Amazon today announced huge discounts on a number of popular items.
The world’s largest e-commerce company has moved prices on HP (NYSE:HPQ) netbooks to $199.99. It is hard to see how the retailer can make much if any money on that. Amazon has cut the prices on some DVDs as low as $7.99.
Some consumer electronics prices have been cut by especially big amounts. LG HDTV prices have come down from $1,400 to $867.
Amazon has also cut prices on a great deal of its jewelry and watch collections by over 60%.
Investors will be watching Amazon’s margins for the fourth quarter. The company is taking a big risk. Its sales may move up because of discounting, but tts gross margins could move way down. Jeff Bezos has had a remarkable run as America’s retail marketing genius. If he prices his inventory too low to pick up market share, that run may end.
Douglas A. McIntyre