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Uncategorized Friday, October 12th 2012 at 3:00 pm

Amazon Makes No Profit on Kindle Sales, Follows Drug Addiction Sales Model

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The trick to being a drug dealer, or so I’m told, is understanding that one must build a clientele. The key to financial success is to offer a taste for free in order to hook folks. You’re want to provide a service, after all, not just score a single sale. This mindset is also apparently shared by Amazon, as they make no profit on the sales of their Kindle Fire HD or Paperwhite. Amazon’s profits instead come from the odds and ends purchased via these platforms.

BBC News explains:

Mr. [Jeff] Bezos made clear that the devices’ success would depend on how many books and other media files were subsequently bought by their owners.

“We want to make money when people use our devices, not when people buy our devices,” he told the BBC.

It’s in Amazon’s best interest, then, to get people to rely on their platform. The want people to need it. Crave it.

(via BBC News)

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  • http://www.facebook.com/people/Bruce-E-Screws-Jr/5200506 Bruce E. Screws Jr.

    Google also give away the Android platform, but makes their money off of content as well. Apple makes money off of all the devices they sell, plus the content. I do not think Apple’s business model will last if they do not continue to innovate faster than their competitors.

  • Idlethoughts

    Apple seems to have a fairly successful business model already and have always been about trying to innovate their technology; I think they’re doing fine.

  • http://www.facebook.com/people/Bruce-E-Screws-Jr/5200506 Bruce E. Screws Jr.

    They are doing fine now, but that may not last. Sony was once on the cutting edge of technology too, but it has slowed. It is very tough to come up with the “next big thing” over and over without a major flop. They also can patent an insane amount of things to discourage their competition from innovating.