Quote:
Originally Posted by Wolfgan
I agree that a lose money strategy is not sustainable in the long run, but consider that Isuppli calculations only take into account the bill of materials, and you need to add the cost for assembly, shipping from the other side of the world, distribution, marketing, channel margins, etc etc
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The Isuppli numbers DO include assembly cost, and are not just the sumtotal of parts costs. Remember this is Chinese slave labor. The teardown excludes everything else because those costs are impossible to estimate.
Quote:
Originally Posted by AnemicOak
They lose money on most of the $9.99 hard cover equivalent best sellers. They do not lose money on most titles.
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Since bestsellers are, um, the best sellers, Amazon loses money on eBook sales overall. And I'm sure bestselling authors would not stand for being gipped. Amazon is definitely the one losing money. This loss is subsidized by sales of the Kindle device, the exact opposite arrangement that Robertb proposes. Of course, this upside-down condition is temporary. eBooks will eventually be sold at a profit and readers will be sold at low margins. Next, the readers could be subsidized by the eBook sales or even given away free like cell phones along with commitment to a service plan. That's what Robertb is thinking of, but it's not the current situation.