Buy.com founder Scott Blum is proving to be a thorn in the side of Amazon.com.
In a full-page advertisement scheduled to run in The Wall Street Journal today, Blum encourages Amazon.com shoppers to switch allegiances in order to receive "lower prices, huge selection, award-winning customer service and free shipping!"
The letter is the latest volley by Blum, who rebought Buy.com last year for $23 million and quickly began rebuilding the struggling online retailer.
Now after several months of cutbacks, Blum's marketing strategy has become clear: knock Amazon.com off its online retailing pedestal.
It's not personal. Purely business, Blum says.
"The only thing we are out for is their customers," said Blum, adding that Amazon.com's 30 million shoppers is a "healthy database to attack."
"There is nothing between me and Jeff (Bezos); I have a ton of respect for him," Blum said. "But do I want to finish second to him? No, I don't want to finish second to Jeff."
Buy.com, which gained notoriety during the Internet boom for selling goods below cost, has instituted several policies in the past month that fly in the face of Amazon.com.
Last month, a day after Amazon.com began free shipping on orders over $49, Buy.com announced free shipping on all orders regardless of price. A week later -- in a news release titled "Buy.com Starts Price War with Amazon.com" -- Buy.com began selling books at prices 10 percent below Amazon.
Trying to woo customers away from established companies is nothing new in the retail world, where consumers have only so much disposable income to spend.
Amazon.com spokeswoman Patty Smith said Amazon has always attempted to focus on the customer experience. She declined to comment on Buy.com's marketing tactics or whether they were having an effect on sales, saying only "we are not really focused on what our competitors are doing."
Buy.com, based in Aliso Viejo, Calif., has a long way to go before it surpasses Amazon. While Amazon.com is the second-biggest online retailer with 31 million visitors, Buy.com doesn't even crack the top 50, according to comScore Media Metrix. Sales at Buy.com were $80 million in the first quarter, far below the Amazon.com's $847 million.
But Blum -- who equates his rivalry with Amazon to the cola wars and the Wal-Mart-Kmart feud -- thinks there is room for his 5-year-old company to climb the ladder.
"There is no one out there who is bulletproof," he said. "I think Amazon is eight or nine times bigger than us right now -- which is pretty big -- and I have a ton of respect for them. But I don't think they can't be beat."
Unlike Amazon.com, Buy.com relies on third-party distributors to pack and ship books, electronics and other products. As a result, Buy.com -- which has about $5 million in cash -- operates with a staff of 125 people, compared with Amazon.com's more than 7,000 employees.
Amazon.com allows third-party vendors to sell through an open marketplace on the Web site, a popular feature that accounts for nearly a quarter of U.S. orders. Still, the bulk of orders are processed at the company's distribution centers. Last year, Amazon.com spent $374 million on fulfillment costs. The year before, it was $415 million. Still, Smith said, the distribution centers are not a handicap.
"It also means we have a greater inventory and greater selection," she said. |
