ByronM - 7:45 pm on Jan 16, 2008 (gmt 0)

What amazon does isn't necessarily a marketing gimmick. The free shipping was made a while back and still applies today. What the free shipping does is limit the supply - through a gimmick. When a book costs 23.95 from amazon and 32.95 from a competitor merely because of shipping people will choose amazon.

The only way amazon was able to do this was by negotiating supply contracts and lowering the price so they could absorb shipping. They also negotiate shipping so they don't pay the full retail rate as well.

In a free market the entire market would enjoy the same wholesale pricing and lower shipping costs. I mean, that is the basis for a free market.

Competition would be back on value, service, support, warranty, products, selection and everything else that used to go with value.

I think i've said my peace ;) I have nothing against amazon and in a pinch i buy from them vs even my own store. I can't even compete with 'em.

I'm not giving up, i'll carve out my niche but even then i'm sure the niche's will disapear since that is now the core focus of much of fortune 500's M&A is setup to drive over the next few years.