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Originally Posted by DMcCunney
The question is whether Amazon is playing the loss-leader game and accepting no margin or a loss to build market share. It's possible, but I doubt it. I definitely doubt it in the US market affected by Agency Pricing. The publishers were reacting to lowered revenues because Kindle editions were competing with hardcovers. If Amazon was actually paying publishers the same price for the Kindle edition as the hardcover, Amazon would be putting the loss in "loss leader", and I really don't see them doing that. Retailers will accept lower margins (or even losses) on selected hardcover titles to generate traffic and other sales. (The Harry Potter books were popular for this.) They won't do it across the board on all new titles. They want to stay in business.
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I think you are probably right that they are not generally selling at a loss in the US market, it is a much more established one for them, and they are in a different stage of growth.
If they are not selling at or below cost in the UK, but are selling at less than 50% of the price of other stores then either they have a much better deal with the publishers or the other retailers are
really ripping people off. I believe that in the UK they are willing to run eBook sales at a loss for 6-12 months to grab marketshare.