CNET: Overstock undercuts Amazon pricing

Overstock.com will undercut Amazon.com's retail prices for best sellers by 25 percent in the month of September as an "experiment." The discount e-tailer has been surgically finding an eclectic mix of niche products and categories in which it can offer significant discounts.

Early e-commerce efforts gave rise to the fear that the web would commoditize retail, offering unprecedented price pressures for stores going online. In the past few years these fears have eased, as much consolidation led to a retail environment with fewer, larger winners. But now a more organized form of mass retail discounting is taking hold slowly online. The "Wal-mart" strategy of cutting deeply discounted exclusive deals with suppliers is one that Amazon.com itself hoped to bring to the online world. The Overstock experiment shows that it too remains vulnerable, however, to having categories undercut.