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Originally published August 1, 2013 at 7:11 PM | Page modified August 2, 2013 at 7:39 AM

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Overstock taunts Amazon with price war over books

The Utah e-tailer is trying to lure customers by fighting the Seattle giant on its own turf.

Seattle Times business reporter

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Hrm... Overstock is outside of WA so they don't collect sales taxes directly. MORE

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Hoping to lure new customers to its site, Overstock.com has picked a fight with online retail giant Amazon.com, extending its price war on books into a second week.

The Utah retailer, which got its start selling discounted closeout merchandise, wants to draw shoppers who traditionally haven’t spent money on the site by pricing its library of 370,000 book titles 10 percent lower than Amazon. Each day, Overstock’s computers scan prices of books on Amazon, resetting prices on its site.

Amazon has responded by matching those cuts on many of the most popular titles, leading Overstock to cut prices again. Thursday afternoon, for example, the hardcover version of David Sedaris’s new book, “Let’s Explore Diabetes with Owls,” was selling for $10.77 on Overstock and $13.72 on Amazon.

Overstock hasn’t always been able to keep up with Amazon’s price cuts. Thursday afternoon, Amazon’s best-selling title, Reza Aslan’s “Zealot: The Life and Times of Jesus of Nazareth,” was selling for $18.10 on Overstock but $16.20 on Amazon.

The company launched the price war for a “limited time” July 22 and said Thursday it was extending the battle for another week.

Overstock isn’t known for its book offerings. But Chief Executive Patrick M. Byrne said the price war was really designed to bring new shoppers to the site to buy other items.

“It’s a customer-acquisition play,” Byrne said. “People buy the book, and they buy a toaster, too.”

He noted that the approach is similar to the one Amazon used years ago to launch its business, focusing on books to draw shoppers. Byrne added that the strategy of getting customers to buy more than the low-price book is paying off.

“It certainly is happening a lot more than it did a week ago,” Byrne said.

Amazon, which is 50 times larger than Overstock when measured by sales, declined to comment on the price war.

But the company has never been hesitant to squeeze its own margins to maintain or boost its market share.

The move is a bold one for Overstock, which has seen its stock climb over the past 18 months as it boosted margins. Byrne wouldn’t say if the company was losing money on the promotion.

But he said it has been successful in both gaining new customers and getting those shoppers to buy more than just discounted books.

“It seems to be working,” Byrne said.

Jay Greene: 206-464-2231 or jgreene@seattletimes.com. Twitter: iamjaygreene

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