What Margins Should You Set Up Against Amazon

A major study of Amazon pricing has revealed that in the US market the big online store is still the cheapest and two stores who operate in Australia are among the most expensive.

According to a study by e-commerce analytics firm Profitero, competitors are now using new analytics software to intensify its efforts to be price competitive with the Company who is currently investing millions to fund their entry into the Australian market.

The research study across 13 categories found that only Walmart.com’s prices were able to come anywhere near challenging the online giant.

On average Walmart pricing is 2.9 percent higher than Amazon’s this is down from 9 percent in a similar study from 2014.

The bad news for consumer electronics retailers in Australia is that when it came to consumer electronics Walmart was 7% more expensive.

On the other hand, research shows that Australians are prepared to pay up to 10% more to shop at a retailer they “trust and know”.

The least competitive tech sites were Newegg and Staples who operate both have retail operations in Australia.

*Electronics were priced 12.4 percent higher on Bestbuy.com. *Target.com’s CE prices were 17.2 percent pricier. *Newegg was 22 percent above the Bezos bunch.

*Staples, which cited Amazon’s office-supply dominance in making its merger bid for Office Depot, was 39 percent higher in CE online.

The gap was even wider in appliance pricing, with Jet higher by 9.2 percent, Target ahead by 12 percent, and Best Buy nearly 17 percent more expensive online.

“This year there’s been a marked rise in discussion about an online price war,” noted Keith Anderson, Profitero’s strategy and insights senior VP and the author of the report. “While lower prices are good news for shoppers,” he said, “suppliers and retailers will inevitably feel the pressure as we head into peak holiday season, as this price war is only set to intensify.”

Profitero analysed daily prices from June 1 to Aug. 31 across 13 categories: appliances, baby, beauty, electronics, furniture, music/CDs, office electronics and supplies, pet supplies, sports and outdoors, tools and home improvement, toys and games, video games, and vitamins and supplements.

The complete report, “Price Wars: A Study of Online Price Competitiveness,” is available for complimentary download.