Tis the season to put your retail establishment back in the black, so it goes with the excitement around Black Friday. The retail business has built getting back into profit by getting back in the black around the Thanksgiving Holiday with Black Friday deals. However, Amazon’s Black Friday won’t be about the black but about the red when you consider the sale of the Amazon Kindle Fire Tablet.
Andrew Rassweiler has revealed on iSuppli.com that Amazon is lterially losing $2.70 for every Amazon Tablet they sell to someone. With Amazon making shipping free on these tablets they are also not recouping costs anywhere in that side of the business either. A dollar by dollar breakdown was revealed in the article and truthfully doesn’t cover other costs.
So you could be saving anywhere from $20 – $30 when you purchase an Amazon Fire tablet for the Christmas Holidays. Additional costs like software, licensing, royalties and other expenses like the shipping and packaging haven’t even been included in the figures. When it’s all said and done you can smile as you’re putting Amazon in the red while making away with a great deal for a leading tablet on the market.
It’s easy to really scratch your head and wonder why Amazon is willing to lose money on their Kindle Fire sales. It’s not a whole lot different than cellphone contracts that give you the phone up front for a low cost but make money over the 2-year contract in services and software. Mr. Rassweiler over at IHS iSuppli breaks it down for us like this:
“Amazon makes it money not on Kindle hardware, but on the paid content and other products it plans to sell the consumer through the Kindle. This is a similar business model to wireless companies such as AT&T or Verizon. They sell you a phone that costs them $400 to $600 or more to make for a price of only $200. However, they expect to more than make up for that loss with a two-year service contract.”
If you’re still wondering whether a Kindle Fire is a good deal, you might need to avoid tablets all together this year because this one is a steal! Merry Christmas to you and Happy Red Friday to Amazon.