To any reasonably intelligent observer of the Internet phenomenon, this should not come as a great surprise. This idea is not rocket science. After all, a virtual bookstore doesn't have the overhead of rent and upkeep that a physical bookstore has. As one of those consumers, all I know is that I'll find virtually identical prices for a mainstream book today, unless I'm silly enough to buy it at the airport bookstore just before I jump on a flight. After all, the Japanese automobile industry used the same strategy in the 1960s, and the Indian software-outsourcing industry used the same strategy in the 1990s.
Cheap prices can be an attractive way of getting attention in an established marketplace.
In the case of the Japanese automobile industry, one of the obvious answers was better quality. In the case of the dotcom companies, factors like quality and convenience can be used as competitive weapons. Here are three books we think you'd like, based on your recent purchasing patterns. But I think there are far greater opportunities to create virtual communities consisting of affinity groups based on products or other consumer preferences. And what we've begun seeing in the dotcom marketplace is that fittest no longer means offering the biggest discounts.