The big news here is that Buy.com now offers free shipping on nearly all
products with prices lower than Amazon.  That's right, super low prices,
free shipping, and of course no sales tax on products delivered right to
your front door.

Kelly

Chicago Tribune


Buy.com takes aim at Amazon on prices --------------------

By David Colker.
Special to the Tribune.
David Colker is a staff writer  for the Los Angeles Times, a Tribune
newspaper

July 1, 2002

Humbled mightily by the tech downturn, the once highflying retailer
Buy.com is attempting a comeback.

The company, the fourth-largest online retailer before its stock price
plummeted to pocket change, said last week it plans to challenge
Amazon.com by undercutting the industry giant's book prices by 10
percent.

"We are gunning for them," said Buy.com's chief operating officer, Brent
Rusick. Buy.com had announced it would not charge shipping fees for small
items, such as books.

Amazon officials said they had no immediate plans to match the prices.

"We focus on the customer, not the competition," said Amazon spokeswoman
Patti Smith.

The Amazon site gets 30.9 million visitors a month, according to ComScore
Media Metrix ratings. Buy.com gets 2.4 million.

Analyst Jeetil Patel of Deutsche Bank Securities said he was wary of an
online company that offers deep discounts.

"The years 1999 to 2000 are littered with bankruptcies of companies that
sold just above, just below or at cost," Patel said. "It's not
sustainable."

Indeed, drastic price cuts played a role in the decline of Buy.com, which
in 2000 billed itself as having the "lowest prices on Earth." When the
company later raised prices to help cover operating expenses, customers
were alienated.

Buy.com President Robert Price said that this time around, discounts can
be sustained because of the company's streamlined operation. With about
650 employees at its height in 2000, the company now has 100.

It once was housed in a 50,000-square-foot building. The new facility is
about 20,000 square feet.

Patel said that even if Buy.com's discounts can be sustained, Amazon's
strong brand and customer service record might shield it from major
effect.

"There is always a risk factor out there," Patel said, "but we have to
see how well Buy.com does in terms of fulfillment, the customer
experience."

The company, bought at 17 cents a share, or $23.6 million, by founder
Scott Blum in November, retains the sophisticated technology
infrastructure and other facilities that prior stockholder investment
funded.


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