OnDemand WTP Pricing Research

Jeff Bezos’ Lemonade Stand | NYTimes.com

Jeff Bezos, chief executive of Amazon, right, was interviewed this month by Henry Blodget of Business Insider.Credit Mike Segar/Reuters

Sales boomed. “It’s Adam Smith economics that volume will go up when prices go down,” Amazon’s chief executive, Jeff Bezos, explained to The New York Times in January 2002.

Mr. Bezos added that Amazon, which was then offering free shipping on orders over $99, would continue to cut prices as its efficiency increased. That year, Amazon lowered the bar for a 30 percent discount to $15. Shipping soon became an even better deal. Traditional bookstores, which had to charge sales tax while Amazon did not, simply could not compete. Borders went out of business.

Then the process went into reverse. Although Amazon does not reveal its pricing strategy, that blanket 30 percent discount seems a thing of the past. Customers today also pay sales tax in much of the United States, which equates to a price increase of as much as 9 percent.

Mr. Bezos is apparently now using a different measuring stick than Adam Smith economics. Books are helping pay for the company’s expansion, he suggested in an interview this month at a conference hosted by Business Insider, a website he has invested in.

Read complete article here:

Jeff Bezos’ Lemonade Stand.

1 Comment on "Jeff Bezos’ Lemonade Stand | NYTimes.com"

Trackback | Comments RSS Feed

Post a Comment

WP-SpamFree by Pole Position Marketing