Do you often shop online or in local stores while you are studying in foreign countries?

Problem for Bezos: Mall Becoming Cheaper Than Amazon

By Tom Gara | The Wall Street Journal – 4 hours ago

Cited from Yahoo! Finance   http://finance.yahoo.com/news/problem-for-bezos--mall-becoming-cheaper-than-amazon-160737573.html

You might think the biggest challenge for Amazon founder Jeff Bezos is figuring out how to make money running a print newspaper, but here is a risk hitting much closer to home: Brick-and-mortar retail stores are becoming cheaper than Amazon (AMZN).

At least one store, that is. Prices at Bed Bath & Beyond (BBBY) were on average 6.5% less than at Amazon for a basket of 30 items chosen by analysts at BB&T (BBT) for one of their periodic pricing studies comparing the retailers. “We are becoming increasingly concerned Bed Bath & Beyond is sacrificing gross margin in order to drive top-line growth,” BB&T said — that is, increasingly concerned that Bed Bath & Beyond is starting to behave more like Amazon.

One big factor helping Bed Bath & Beyond are the 20% off coupons it regularly sends to its customers. Once you adjust for those, the price gap widens out to 25%.

But even without the coupons, Bed Bath & Beyond is cheaper than Amazon for many items, sometimes considerably so. This shower curtain, for example, is $24.99 at the former and $32.39 at the latter — a 23% difference before any coupons are taken into account.

The price competition is another sign of the multi-front battle between Amazon and the giants of American retail. Some, like Best Buy (BBY), have introduced price match guarantees promising customers to meet any Amazon price for items in their stores. Others, including Wal-Mart, are putting an increasing focus on their online operations, and using their networks of physical stores as distributed delivery points.

Most importantly, Amazon is gradually losing a price advantage it long enjoyed by not charging state sales taxes. While the company has done deals with a number of state governments to start collecting the taxes — including major markets like California, Texas, New Jersey and Florida — in states where it still does not collect sales tax it enjoys a 5%-10% “pricing advantage,” BB&T wrote.

That advantage is also set to be scaled back by the proposed Marketplace Fairness Act, which has passed the U.S. Senate but has yet to be put for a vote in Congress. Amazon supports the Act, which would require online retailers to collect state sales taxes, as do the big brick-and-mortar retailers.

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It’s not just physical retailers putting Amazon in their sights — online competitors also seem focused on matching the company’s low prices. Today online retailer Overstock announced it would match all Amazon prices on books, in a move coming just a month after the company said it would undercut Amazon by 10% in the book market — a discount Amazon quickly matched.

“Last month we started a book pricing war with Amazon,” said Patrick Byrne, Overstock.’s chairman, in a statement announcing the price matching. “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.”