Overstock Continues to Wage ‘Pricing War’ With Amazon With New Discounts
Online retailer Overstock.com has been waging a price war with its larger competitor Amazon since July, focusing on the business for which the Seattle-based company is best known: books.
In a statement today (below), Overstock announced a fresh salvo in its war against Amazon, this time targeted at enhancing its rewards program. In addition to matching Amazon’s book prices, Overstock will now give its “Club O” members “Club O Dollars” worth 15% of the book order purchase price. According to the company’s website, Club O Dollars are “earned rewards that are as good as cash on future Overstock.com purchases.” Club O members receive free shipping on Overstock orders for $19.95 a year.
“Last month we started a book pricing war with Amazon,” said Patrick Byrne, Overstock.com chairman and CEO in the statement. “We’re hoping to continue that battle, in a way that lessens any harm to the mom-and-pop booksellers we consider our comrades in arms.”
Since this pricing promotion targets Overstock’s “most loyal” customers, it shouldn’t harm local bookstores which have already lost the business of dedicated online shoppers, the company reasons.
In late July, Overstock announced that it would sell books for 10% lower than the prices found on Amazon. Amazon quickly matched prices on many titles. Overstock then extended its promotion. Overstock does not currently sell ebooks.
Overstock Offers Books at Amazon Prices With 15 Percent Rewards to Club O Members
Overstock CEO doesn’t want price war to affect independent booksellers
Overstock.com, Inc. (NASDAQ: OSTK) is offering its entire selection of books at prices that match Amazon.com. Additionally, members of Overstock.com’s loyalty program, Club O, will now receive Club O Dollars equaling 15 percent of the book purchase price to use toward future purchases.
In July, Overstock.com priced 360,000 book titles 10 percent below Amazon, a move Amazon tried to match on their top sellers only.
“Last month we started a book pricing war with Amazon,” said Overstock.com Chairman and CEO, Patrick Byrne. “We’re hoping to continue that battle, in a way that lessens any harm to the mom-and-pop booksellers we consider our comrades in arms.”
Byrne explained that Overstock.com’s book pricing policy going forward will be to match Amazon prices while giving Club O Dollars equal to 15 percent of the book price to Club O members on all book purchases. This effectively undercuts Amazon’s book prices for Overstock.com’s most loyal customers, without adding undue pricing pressure on independent bookstores.
Club O memberships are available to Overstock.com customers for $19.95 per year and are free to members of the United States Armed Forces. Club O members receive free shipping and at least 5 percent in reward dollars for all purchases, and now 15 percent in reward dollars on book purchases, and 25 percent in reward dollars on hundreds of select products.
Shipping is free to all Overstock.com customers if their order is at least $50; for orders less than $50 shipping is $2.95, regardless of how many items are in each individual order.
Overstock.com (NASDAQ: OSTK) is an online discount retailer based in Salt Lake City, Utah that sells a broad range of products including furniture, rugs, bedding, electronics, clothing, jewelry and cars. Worldstock.com, a fair trade department dedicated to selling artisan-crafted products from around the world offers additional unique items. Main Street Revolution supports small businesses across the United States by providing them a national customer base. The Nielsen State of the Media: Consumer Usage Report placed Overstock.com among the top five most visited mass merchandiser websites in 2011. The NRF Foundation/American Express 2011 Customer Choice Awards ranked Overstock.com #4 in customer service among all U.S. retailers. Overstock.com sells internationally under the name O.co. Overstock.com (http://www.overstock.com and http://www.o.co) regularly posts information about the company and other related matters under Investor Relations on its website.
Overstock.com®, O.co®, Worldstock Fair Trade® and Club O Rewards® are registered trademarks of Overstock.com, Inc. O.info™, Club O™, Club O Dollars™ and Your Savings Engine™ are trademarks of Overstock.com, Inc. All other trademarks are the property of their respective owners.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, statements regarding the pricing effect on small booksellers. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company’s Form 10-Q for the quarter ended June 30, 2013 which was filed with the SEC on July 25, 2013, and any subsequent filings with the SEC.
Want to learn more about how pricing affects sales? Check out this informative video from the Digital Book World Conference + Expo: Ebook Pricing State of Play and Analysis.