Wal-Mart charges more for some products online than in stores | Hacker News Reader

Wal-Mart charges more for some products online than in stores

wsj.com

47 pointsnopinsight70 comments

Back in college, a friend of mine wanted to buy an expensive SLR camera. He researched the prices diligently, and found a place in LA with the best price. So we all piled into his car, and went to buy it.

Once there, he naturally bought a lense, flash, case, carrying strap, film, filter, etc. Back in the dorm, he ruefully added things up and compared again and found out he'd paid, in aggregate, top dollar!

An awful lot of analysis and variables go into setting prices, and whether an item is in-store or online is just one factor.

> he naturally bought..

Is it not well know that addons have the greatest markup?

We were kids. And so we learned :-)

Shouldn’t this be ok? Sometimes they want loss leaders for you to come in person. Also, they may not have 100% accuracy on your location until you check out. This is no different than having prices change by geography. You wouldn’t expect to pay the same in Mountain View as you would in Albequerque.

> You wouldn’t expect to pay the same in Mountain View as you would in Albequerque.

If this isn’t the appeal of walmart, what is?

I'd say that's the appeal of Amazon prime - not Walmart. Amazon is much less affected by local market dynamics

Im not sure I've ever been to a Walmart, but isn't the appeal that it's a one stop shop (+ low prices)? That seems pretty damn useful and has approximately nothing to do with cross-region price differences.

woah! where do you live?

There are no Walmarts in San Francisco AFAIK, but there were plenty in LA, where I grew up. We just never went to them, you'd have to ask my mom (and all of my friends' parents) why.

Right, but that makes the online component even more confusing. Why would you ever order from walmart.com if they don’t offer those competitive prices? Amazon has plenty of stock, more than walmart can compete with. I can’t buy notebooks from japan from walmart—at least, not of the same quality, variety, and price amazon offers.

I had the impression that they're just saying that Wal-Mart's prices online are occasionally higher than their prices in-store, not that their online prices are higher than Amazon's.

I'm becoming increasingly wary of buying things on Amazon. I've received bootlegs from listings that looked genuine, fallen prey to misleading reviews for things that turned out to be of substandard quality, and so on. And it's been getting worse over the last couple of years. And this is even with "fulfilled by Amazon" items. They're not good at policing their reviews or listings for accuracy, and it often turns out that the same listing might get you different products between different orders.

> Why would you ever order from walmart.com if they don’t offer those competitive prices?

I've bought from Walmart online only once or twice ever: in one case they had the camera I wanted for $250 cheaper than Amazon and in another Amazon didn't have the product at all.

Low prices, yes. But real estate and labor costs are lower in New Mexico than California. Perhaps taxes too. So they have different prices by region. (Otherwise they couldn't be profitable everywhere, and then they lose economies of scale) Not that different on pricing differences between countries.

So why don't they advertise the Walmart Price (tm) in small font, and then add a multiplier which takes all that into account?

Seems like a good way to influence consumer sentiment in places that won't play ball with you, if you're an abusive plutocratic organization.

Right, but then why buy from walmart if the competitive price is gone (as shown in the original example of online vs retail price)? If it’s just a single region agnostic price plus some location sensitive fee, they’re just another branded ecommerce store beholden to their sellers and distribution for pricing determination. Amazon wins with price, quality, inventory, and selection.

> Amazon wins with price, quality, inventory, and selection.

Not always... I bought something on Amazon last week and the 3rd party seller drop shipped it from Sam's Club (wal-mart). I saw the packing slip, looked it up on samsclub.com and realized I had paid 20%/$4 more at Amazon than they paid at Sam's Club.

Amazon has a great price on a lot of things, which has taught us to think they have a great price on everything. Amazon also takes at least one day to get something to your house. If you need something immediately, that's where retail wins every time... it doesn't even matter what the price difference is.

Right, but we’re discussing walmart.com vs amazon.com because walmart.com doesn’t have the crazy low prices that the retail store does. You’re absolutely right you can easily undercut amazon at sam’s club, so (eg) why can’t walmart.com match that undercut?

Isn't this... obvious?

Experimenting with offline prices and measuring its impact on sales is hard. Doing it online is very easy. You can even show different prices to different users and gather information about their shopping throughput.

Thinking that a company's ultimate goal is to increase profits, it's easy to see why they would want to do this.

This isn't exactly surprising to me. On Amazon especially, some common items like school supplies are priced way higher than equivalent items in brick and mortar stores. I always figured it had to do with the cost of shipping and supply chain logistics.

Was it back-to-school shopping time?

Stores always price one or two common items super cheap to get you in and figure you'll buy everything else once you're there.

You can look up the costs - and even sign up for the seller programs - really easily. For small items, it looks like FBA (Fulfillment By Amazon) costs $2.50 a pop to handle prime shipping/customer service/returns/etc. And I think you have to pay for shipping to their warehouses, too. Plus warehouse space, but that looks very cheap for small volumes at a glance.

So if you see something that costs $5 with multipack options of 3-4/$10...well, there you go.

And you too can make any product available to a huge audience with 2-(ish)-day shipping...no wonder they're going like gangbusters.

I thought everyone knew this... a lot of retail stores do this.. sometimes it's more expensive in the store than online. I know target and walgreens like to charge more in the store than online.

Perhaps you interpreted the title backwards?

No, I've been to bed bath and beyond, target, and bestbuy and found things cheaper in the store than online.

My point was, the two aren't tied together.. they're usually completely separate operations.

The point you’re missing is why would something be more expensive online than in store? It makes sense that an item in store to be more expensive than an item online because of the costs involved in running a store and hiring employees, but the other way around doesn’t make much sense.

Why does a refrigerated, 20oz coke cost 2x a 2 liter bottle of warm coke 50 feet away?

Convenience. If you are willing to pay an extra $1 on toothpaste to avoid walking 50 ft, it’s worth another $1.

Well, actually that refrigerator costs money to run. You are paying for something cold that can be drunk now.

The minion who runs around and retrieved your tube of toothpaste isn’t free either!

The local stores are setting prices in comparison to other stores in the area. The online store is setting them versus other online retailers.

If a competing store in the area has a sale on an item, target (for ex) will mark it down too.

But that has nothing to do with the online website... the website doesn't care what the local price is.

You're forgetting that for brick and mortar stores which already have an efficient supply chain built for getting items to their stores it might be more expensive to get an online supply chain in place.

Physical stores still make money: especially WalMart, which tends to cater to lower income groups which may not even be shopping online. And they don't have the online volume yet to reduce the prices as much as someone like Amazon.

Walmart does both.

(Source: have been to Walmart and have browsed their website)

Also, some stores, like Target, will not price-match their own website. The operations are apparently far enough apart that they won't sell that item on the same sale schedule or price ever.

I've had them price-match their own website. Your mileage may vary.

Interesting; this could also be a newer thing. The only time I tried and failed at two Targets was probably a couple years ago by now.

I did this successfully at a completely different store - a Media Markt in Berlin - using the approach: "Look, I want to buy this and I could order it online to this store, which would be silly: I have to wait, and you don't make a sale" in a slightly amused, non-confrontational tone. Now I don't think it is likely that the result depended on the approach, but inofficial store policy. Media Markt is expensive except for special offers.

It was about two Logitech gamepads for ~15€ less overall.

I always found that weird. They had a sale on IPads online and went to store to grab one and they wouldn't honor the online price though you can order online and pick up at the store.

Target desperately wants to be completely viable as an online shopping destination, a reverse Amazon if you will. They have the profits and the time to force everybody through a funnel designed for the business model they'd like to be using in the future.

Target definitely price matches their own website, as well as several online competitors. See https://corporate.target.com/about/shopping-experience/shop-... for the full policy. You basically have 14 days to go back and request a price match if you find the item cheaper online.

I think it just depends on retailer and the item, time of year etc.

Walmart will even give you a discount on some items for picking them up in store. I was able to score some hard drives pretty cheaply this way. They had 4tb drives with a something like 40 dollars off in store pickup.

This is known as "Price Discrimination" and is perfectly fine: https://en.wikipedia.org/wiki/Price_discrimination

As are articles that point out that price discrimination is happening. Free markets function best with well informed consumers.

Wal-Mart is a corporation right? They can set prices as they see fit. The market set's the prices of everybody's startup here on HN, why would it be any different for them?

Because their slogan is "Always Lower Prices. Always." So when it's obvious they are lying, it's nice to point it out to others who may not have noticed.

That sounds like a generic corporate slogan, not a contractual obligation

No, their slogan was "always low prices" not lower.

Also it looks like they have/are changing their slogan, I did not read more to confirm... Just googled to confirm the slogan.

They can set their prices as they see fit, and customers can be annoyed about it as they see fit. I don't understand why people think "free market" means no one's allowed to complain.

And News Corp is a corporation too, so they can write articles about it. If the free market didn't demand articles like this then they wouldn't be written.

Amazon sets their prices to match prices of online retailers automatically. Others do too. WM would defeat this by setting online prices higher, making their in store the lowest price.

Without tax and wages cheating everything would be more expensive online than in (large) stores. Amazon shouldn't be able to match Walmart in prices at all. Nor should any other online store.

I get that that doesn't match your experience after 15 years of Amazon.com being cheaper than stores, but there are clear reasons for that and those reasons have been going away.

Tax treatment has been equalizing, Amazon is now charging VAT in a different (much more fair) way, and there has been action against the abuse of international and interstate postal agreements to get free or absurdly cheap deliveries.

Because Walmart physical store employees get paid a lot, right?

I don't find it hard to believe that there's plenty of cheating going on, but I'd bet online will still win in the future. Workers are being replaced, while well located real estate is only getting more expensive.

http://gothamist.com/2015/08/15/life_inside_the_nightmare_am...

Point taken, although I do think Walmart still wins in terms of labour conditions.

I used to order everything from them online - it was great, then I checked receipts and realized they were ripping me off.

No more orders from me.

No idea why they would do this - aren't they trying to compete with Amazon? They are only hurting themselves now.

I do still go to their stores every other month and try to stock up. Maybe that's what they want.

But they are no longer an internet company to me. And long-term I think that is foolish.

I wish Amazon grocery prices were competitive. But they like brand names too much, and I avoid those usually.

> I used to order everything from them online - it was great, then I checked receipts and realized they were ripping me off.

What I usually do is go through their website for things I want to order, note their prices, and then go to the store. Anything on the list that's cheaper in the store I'll buy. I'll then purchase the remaining items from their website.

Given Discover's promotion of 5% back on online purchases from Walmart.com, it works out for me.

They also include free shipping, so, maybe it's not that much more in the end?

Free shipping if your order is over a certain amount (I think $25). And it's really not free shipping if you pay for it indirectly. In my opinion it's actually worse because they use "free shipping" as a selling point, even though it's not free at all.

In fact, if they add x% to most products, requiring it to be over $25 is just a way of guaranteeing that you are actually paying for shipping in full, just not as an itemized option.

I agree it's not really free... but neither is driving to the store.

But walmart doesn't try to trick you into thinking that driving to the store is free.

How is it a "trick"? You may prefer to have it itemized rather than bundled, but the total price is what matters. Using "free shipping" actually makes it less tricky to compare prices, since you know they won't slap a big shipping fee on checkout to make up for low prices.

Isn't that obvious? How else would they pay for the "free shipping" if not in the profit they make on purchases?

The free shipping isn't from the profit they make from their products, it's from the extra cost added to all their products that are listed online. Their pre-shipping profit is greater than the profit of the items in the store. Once they spend the money to ship the items, it's roughly the same.

For example, let's say a widget costs $10 in Walmart stores and will cost $1 for walmart ship with their negotiated contracts. If I go to the store, I can pay $10 and buy the widget. However, if I go online, Walmart.com will say the item costs $11 with "free shipping", or I can pick it up in store for a $1 "discount" (so now I pay $10 for a "$11" item). So even though they get all the positive PR and subconscious biases associated with free shipping, they are not paying for it at all. They even pretend like you're getting a great deal by going and picking it up yourself, even though you're just paying what you otherwise would have if you skipped walmart.com entirely.

The free shipping isn't from the profit they make from their products, it's from the extra cost added to all their products that are listed online

What's the difference between the profit they make from the products, and money they make from extra cost added to the products? Isn't that just another way to define profit?

that jet website Walmart is running saved me like 30 bucks when I upgraded my GPU, allowing me to get a much better GPU. (budgetary restrictions)

they had a 15% off your first three purchases sale, saved me some money again when I had to get a new HDD around the same time.

it got me to pull the trigger on their site over newegg, and I liked the little discounts you can get by paying with debit or forfieting free returns. it's a novel approach, and at least tries to appear consumer-friendly. I hope it does well.

Weird trends here lately. A friend of mine recently bought a jacket at REI online and saw it cheaper at the REI store. They wouldn't refund the difference and said "we don't price match our own products".

My understanding is that Walmart's store managers have significant latitude in regard to merchandising and pricing. This conforms to my anecdotal experience regarding variations between stores within the same metropolitan statistical area and across states.

Somehow the fact that Amazon and Ebay have different prices for the same items in their online listings seems to shed some light here, but I'm not really sure exactly how or why.

Prices and selection differ between what Alexa quotes and Amazon.com[1]. This kind of stuff is very common, but specifically highlighting Wal-Mart seems odd.

[1] https://www.reddit.com/r/Frugal/comments/6evffg/alexa_prices...

Walmart literally advertises lower prices on select items if you drive to the store and pick it up. Right on the website.

http://help.walmart.com/app/answers/detail/a_id/1698/~/picku...

Amazon gets many of their prices by scraping competitors websites. Higher prices on walmart.com might mean higher prices on Amazon too.

Yeah, no kidding. I have always worn just typical Levis work jeans for most of my adult life just like my grandpa, and the price for Levis has always been "Holy smokes" cheap in Walmart stores and actually fairly expensive online.

Some Kindle e-books are costlier than hard copies..

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