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Bloomberg reports that Walmart is investing in its ongoing price war with Amazon, essentially subsidizing the third party vendors listing products on its marketplace site so they can undercut Amazon's prices and yet maintain their margins.

According to the story, Walmart "introduced a program to temporarily lower the price consumers pay for some items on its marketplace site, where third-party vendors pay Walmart a fee to list their goods. The merchants selling on the site, however, will still be paid the same amount that was listed before the cuts, with Walmart subsidizing the difference."

Bloomberg goes on: "The move appears to be a response to a program Amazon rolled out over the summer where the e-commerce giant has full control to set prices of third-party products sold on its marketplace -- in return for a minimum payout. Amazon has also come under scrutiny for increasingly leaning on vendors to ensure that their products aren’t offered for a lower price on Walmart.com or any other rival website."
KC's View:
It may not be the best time for Amazon is be caught up in such a price war, since, as Bloomberg notes, the Federal Trade Commission (FTC) is looking into its business practices, in search of anti-competitive policies. While Amazon maintains that it "only controls 4% of the total U.S. retail market," data tracker eMarketer maintains that Amazon "controls almost 40% of the U.S. e-commerce market, which is expected to reach $587 billion this year.

Since competition can take many forms, I'd expect Walmart to do everything it can to force Amazon to make moves about which the FTC and various elected officials - - I'm looking at you, Sen. Warren - may take a dim view.

It was Napoleon Bonaparte who once said, “Never interrupt your enemy when he is making a mistake.”