Wal-mart is 20 times larger than amazon.com, yet amazon is trying to compete in a price war.  We’ve all read about Wal-marts tactics in the past.  But in a recent article, the New York Times hits it right on the head with their description of Amazon customers: “affluent urbanites who would rather click with their mouse than push around a cart.”

Sure with one-click or [idiotic] PayPhrase checkout they can capture some impulse buys.  But retail shopping is a completely different mentality.

I believe that where Amazon could win is with independent retailers.  They have an incredibly efficient shipping infrastructure, leverage their buying power to keep prices low.  I’ve talked with many retailers upset at the fact that they can sometimes buy a product on Amazon cheaper than they can from their distributor.  That blows for everybody – its a price and convenience competition.  Independent retailers have a lot of strengths: location, selection, convenience, ambiance, community.  Why shouldn’t they buy from the cheapest / most-convenient distro?

Amazon could get into b2b distribution with a super beefy version of Amazon Prime for retailers buying large quantities. Forget returnables, just products that will move off the shelves.   They should be in the business of making a profit on every piece they move out the door, not focusing on loss-leaders to try and build loyalty or up-sell.  But what do I know?