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WEDNESDAY, NOVEMBER 25, 2009
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Slashing Prices Online May Kill Etailers

Price wars sure to kill off some struggling e-tailers

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(Newser) – Online retailers’ response to their first dreary holiday season is a price war so fierce many won’t see the new year. Web shoppers are trained to search for deals, and 75% say they would leave a site that doesn't offer free shipping, the New York Times reports. Fine for Amazon.com, but many small boutiques can’t absorb those costs.

Veteran stores have felt the economy’s ebbs and flows, and know the perils of price-cutting. “Folks that have been on the ropes or near the ropes during the good times are going to go under,” one analyst said of firms with profit margins too narrow to withstand deep discounts. To make matters worse, Google—also under pressure this dismal season—is hiking ad rates.

Because of the volume of Amazon.com's business, it can absorb the costs of offering free shipping in a way that small boutiques cannot.
Because of the volume of Amazon.com's business, it can absorb the costs of offering free shipping in a way that small boutiques cannot.   (AP Photo)
As fewer people shop this year, online retailers are feeling pressure to lower their prices and offer deep discounts.
As fewer people shop this year, online retailers are feeling pressure to lower their prices and offer deep discounts.   (AP Photo/Kathy Willens)
75% of online shoppers say they would skip a site that doesn't offer free shipping, giving online business another concern stores don't worry about.
75% of online shoppers say they would skip a site that doesn't offer free shipping, giving online business another concern stores don't worry about.   (AP Photo)
Web shoppers are savvy on how to find the most competitive prices, forcing websites to engage in fierce price wars.
Web shoppers are savvy on how to find the most competitive prices, forcing websites to engage in fierce price wars.   (©garethjmsaunders)
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maevealleine
Nov 20, 08 11:12 AM CST
Ok, so etailers that were inflating prices during the good times can't make it now? Good riddance. Reply
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