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