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It’s Amazon vs. Disney in a new pricing dispute

Tracey Samuelson Aug 11, 2014
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There’s a new front in Amazon’s battle with its vendors. Because of a reported pricing dispute,  some of Disney’s DVDs and Blue-rays are no longer available for pre-order on Amazon.com. Book publisher Hachette is in a similar position. Its spat with the e-commerce site has become highly public, with each company publishing scathing letters about the other side. (Amazon’s here, Hachette’s here, and a group of 900 authors supporting Hachette here).

If this were a Disney movie, some would cast Amazon as the bad guy, like the evil fairy Maleficent (OK, she’s  less evil this time around, but still). Others would say it’s a Captain America-esque hero, fighting for lower prices for consumers.

Physical discs of both new Disney films are currently unavailable for pre-order on Amazon, though they are available for pre-purchase through the company’s instant video service.

But, says Ed Brodow, the author of Negotiation Boot Camp, Amazon’s tactics aren’t good or bad –  they’re business. Amazon, like all companies its size, is flexing its muscle to get the best deals possible.

“That’s what people do in negotiation all the time, they use their leverage,” says Brodow. “Amazon has a tremendous amount of leverage.”

Wal-Mart employs similar muscle, says Michael Pachter with Wedbush Securities.

“Wal-Mart pays as low a price as anybody wholesale for any product that it sells, and it’s able to do so by exercising  its market muscle,” he says. “Amazon is trying very hard to be Wal-Mart-like.”

Pre-orders are important for Disney because it will impact their first-day sales rankings, but Pachter doubts customers will miss the option much.

Not everyone agrees.

Amazon’s aggressive tactics risk its reputation with its customers, says Michael Norris, an independent publishing and media consultant.

“It’s really remarkable to me that a company that claims to be very consumer-centric finds absolutely nothing wrong with inconveniencing millions of consumers,” he adds.

 

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