Traditionally a service provider, Amazon has become increasingly big and profitable, because it was able to get into online product sales early. Amazon has been able to boil the business down to make sure that they offer extremely competitive pricing, shipping options and a huge range of products.
Even more amazing, has been the TechCrunch reported number of weekly Kindle sales:
One million each week!
This huge success has been in part due to Amazon’s well established set up, that has enabled it to stay on top of sales by stocking massive numbers of their devices.
The introduction of the youngest family member, the Kindle Fire (pictured above) at only $199 represents a shift in the tablet industry business model. Amazon is taking a loss on each and every one of these Fire’s, because it is comfortable knowing that each sale will mean the product’s loss will be reimbursed by Amazon content purchases via the device.
This is akin to the game system model of sales, where devices like the PlayStation 3, rely heavily on game sales to boost profits out of the red.
The radical success of the Kindle Fire in particular, and the whole Kindle family, may see Amazon making more excursions into the products industry in the future.
Photo Credit [via]