[lechiffre10]

1) The day Amazon feel threatened they can become the cheapest in the market quickly again.

The problem with that statement is that you assume customers will flock back. It might be true in the short term however when you lose customers specifically because of pricing and the monopoly behavior, clients aren't going to quickly forget this behavior. You really think people will come running back and allowing Amazon to do that knowing they did so in the past?

[jstarfish]

Consumer economic memory is limited in both capacity and duration; it only lasts about 8-12 months. After that they start to forget how you boned them and you can easily win them back with a deal on a shitty appliance.

Everyone who boycotted Chick-Fil-A ended up eating there again (if they even remember why they stopped), nobody cares about Wells Fargo's transgressions anymore and even Equifax is slipping out of the popular consciousness. Keep the stock price afloat for 8-12 months and you can recover from anything.

[jachee]

Ever seen a Black Friday stampede?

Price is king.

[bsder]

True.

Except that consumer electronics companies like Frys now get low warranty, extra shitty, extra cheap models to suck the Black Friday morons in since they know those consumers won't buy anything else.

I have, in fact, been warned at several stores (not just Frys) on the weekend afterward: "That's our Black Friday model. This model over here is nominally more expensive ($20-50 max), has the normal manufacturers warranty, and is a really good deal as it's 50-75% off our normal price anyway."

[wool_gather]

But a Black Friday stampede is not representative of a long-term stable customer base. Selling a crapload of stuff at a tiny margin doesn't say anything about your business's ability to make it to the next Black Friday.

[jachee]

My point is that—in the event they get significantly threatened—amazon has proven that they can run their entire retail business as a loss-leader until they re-establish a perception of price dominance.