How can Amazon be profitable selling ebooks when they are "dumping"?.
Because books are not a commodity. All books are not the same. Best sellers get people in the door.
How can Amazon be profitable selling ebooks when they are "dumping"?.
Because books are not a commodity. All books are not the same. Best sellers get people in the door.
And what's wrong with selling some best sellers at prices that would get customers in the door?
Dumping means losing money overall in order to drive competitors out of the market.
Loss leader means profitable because only some books lose money while many books will be profitable.
If Apple uses the LOSS LEADER strategy, would people have a problem with it?
The DoJ recently looked into Amazon for predatory pricing and found nothing. Or, at the very least, didn't find enough to warrant taking Amazon to court.Yep. That doesn't preclude it from being a predatory pricing strategy.
Apple's already been there. They did it originally w/the iTMS. The iTMS wasn't designed to be profitable because Apple, at the time, made bank selling iPods. Rhapsody and the re-booted Napster couldn't match up because they needed to actually run a business by just selling music. It wasn't until Amazon got into the download music game that Apple saw an inkling of a competitor. A multitude of 'always on' devices has changed the landscaped and made streaming services viable now but back when the iTMS launched no one wanted a streaming service when it only worked with your computer.I'm sure some people would. But some people have problems with everything Apple does. I would have a problem with it if they were in a monopoly position and used it to prevent competition.
"Most of the money goes to the music companies," admitted Jobs.
"We would like to break even/make a little bit of money but it's not a money maker," he said, candidly.
So now we have it on record: the music store is a loss leader. Jobs said Apple would pay its dues to the RIAA, then seek to make money where it could, from its line of hardware accessories. When the conversation turned to rivals such as eTunes and Napster, Jobs said: "They don't make iPods, so they don't have a related business where they do [make money]".
The DoJ recently looked into Amazon for predatory pricing and found nothing. Or, at the very least, didn't find enough to warrant taking Amazon to court.
Apple's already been there. They did it originally w/the iTMS.
No, they didn't. There was no loss leaders that I'm aware of outside of a couple freebies of the week.
Fixing margins/prices is illegal. Is not it clear? Today Apple decided to fix margins at 30% tomorrow they may prefer 300%. And did you really notice the drop in quality of e-books when profit margins were reduced?