Apple and Amazon

[ForkHandles]

To what extent do we believe that Apple and Amazon have their own business arrangement?

Famously, Apple never reduces its prices, once set, on a current model. It sets a price and accepts the sales that it generates across all its hardware. When everyone said Vision Pro is a joke at that price it moved not a bit!

So how can it possibly determine its optimum pricing strategy?

Discounts are available on Amazon every week, as advertised by MacRumors regularly.

Is this a partnership between the two companies where Apple discounts to this supplier in exchange for price elasticity data?

Or is it just Jeff Bezos taking a massive hit on his own (Apple) profit in order to put other retailers out of business?

Your thoughts please?

 

[HobeSoundDarryl]

They certainly have probably several business arrangements. Amazon can't sell Apple's products at all without something.

Amazon is likely not losing money on "sales" of Apple stuff either- just making less than selling them at MSRP. Nothing wrong with that- all kinds of stuff is sold in sales at discounts off MSRP. That's a common practice since retailers formed hundreds/thousands of years ago. Price is always one of the easiest cards to play for retailers looking to draw in more buyers.

Apple could offer some special buys to Amazon not so much for price elasticity data but to simply move accumulated product. Or Amazon could bargain with Apple by committing to such large orders that they get some price breaks vs. little retailer who can't guarantee same sizable orders. I suspect Amazon guaranteeing an order of- say- 2 million units is likely to be able to get a better wholesale price from Apple than Bill & Bobs Computer Shoppe guaranteeing an order of- say- 5 units.

Amazon could also be doing the accessories play: that is, sell Apple hardware for close to cost or even cost but then profit on "the rest" of stuff people tend to pick up when they buy new tech. Think movie theater model where the theater doesn't make much of the ticket sale but instead harvests much revenue from the snacks & drinks.

Only Apple and Amazon insiders would know any of this for sure.

 

[XboxEvolved]

If you are referring to how things are deeply discounted on Amazon versus Apple's own stores, I can't really remember to many times where Apple shows actual discounts to products at any of their stores and almost always charges MSRP unless they price match you. Many times you see these sales that Amazon has at other retailers such as Wal-Mart or Best Buy but I think you just see them on a much bigger scale on Amazon simply because of the scale that they work at, and there is less overhead than at a place like Best Buy. Although all of these places seem to match Amazon's Apple product prices since these prices are typically coming out of the Apple Amazon store.