Amazon’s 1 cent shipping in France

An article in Slate (July 11, 2014), titled “France Banned Free Shipping. So Amazon made it cost 1 cent”, describes Amazon.com’s response to a new French law that bans free shipping and permits only bricks and mortar bookstores to offer the up to 5% discount on books. These laws were meant to restore the competitiveness of traditional bookstores. But will Amazon’s counter with a 1 cent shipping charge, far below the actual cost, negate the impact of the law force publishers to lower their costs to Amazon ? Will the real benefits competitive advantage to Amazon be the flexibility for customers to order at any time and access used and out-of-print books which may offer Amazon greater margins ? Will a more coordinated supply chain whereby Amazon works with local bookstores to permit ordering of brick and mortar store books (new and used) be a more appropriate resolution for customers ?

About aviyer2010

Professor
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