Walmart Can Maintain Its New Price War With Amazon If...
The world's biggest brick-and-mortar retailer just escalated its price war with the world's biggest e-commerce retailer. That is, Walmart (NYSE: WMT) is subsidizing price cuts it requested of some third-party sellers offering their goods at Walmart.com. The move, according to Bloomberg, appears to be a response to a similar price-lowering strategy Amazon.com (NASDAQ: AMZN) put in place in August.
It's clearly good news for shoppers, and it's not bad news for the merchants utilizing Walmart's e-commerce venue. It may even be good news for those vendors, as lower prices for consumers may improve their total sales volume. The losers in this paradigm are investors, who are supplying the subsidies in the form of thinner profit margins.
Even so, if Walmart handles the new strategy effectively, it might be well worth the added cost of doing business.
Source Fool.com
