Posts Tagged ‘amazon’

With New Kindle, Amazon Gets Brazen.

Wednesday, May 6th, 2009

In the technology industry, two businesses stand out as having risen above the sea of profit losses, revenue declines, and layoffs: Apple and Amazon. While Apple posted a banner quarter recently, Amazon’s also doing remarkably well, with its profits jumping 24% in the first quarter, and beating expectations for the second quarter running. Amazon’s doing so well, in fact, that it has emboldened them to release the newest version of their Kindle electronic book reader today. The new Kindle DX, which is substantially larger than the current model, and is also substantially more expensive at $489, hits the market today. The smaller Kindle only costs $359.

But is the move a smart one? While it’s estimated by Citigroup that Amazon will sell around one million standard Kindle readers this year, it still strikes us as an incredibly ballsy move to release a premium product that’s more expensive than the standard model during a time when most businesses are slashing costs and offering discounts. Amazon can certainly get away with it, of course, because of just how well they’ve been doing. But it’s an aggressive move nonetheless. The question we have is whether it’s a tad too aggressive.

What do you think about Amazon’s timing in releasing the new Kindle now? Would you buy one of the new Kindles? And would the nearly $500 price tag be a deterrent to you? Tell us what you think in the comments section below.

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Tags: amazon, economy
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Word-Of-Mouth Good For More Than Spreading Rumors.

Tuesday, August 26th, 2008

Most of the time, big corporations serve as a great lesson in what not to do in business. However, as a small business owner (or someone who’s thinking about launching a start-up), here’s one strategy worth swiping from the big guys’ play book. Amazon has come up with a cheap and highly-effective way to hawk their wireless reading device, the Kindle: get the customers to push it. Amazon currently isn’t running any outside advertisements for the Kindle. Instead, they’ve launched a campaign on their site that encourages happy customers to tell others about their Kindle either through comments on the site, or programs like “See Kindle In Your City,” where current Kindle owners can demo their reader for people who are interested in buying them.

The strategy seems to be working, according to Wired, who has a piece online about Amazon this week. While no official numbers have been released (although there’s been plenty of speculation), anecdotally it appears the Kindle is selling far better than expected. Reports Wired: “Amazon is relying more than ever on its tried-and-true sales strategies of word of mouth and customer reviews, and it appears to be working, although the total market for the device is questionable.”

The take home lesson here is two-fold. First, it’s not always necessary to have an expensive ad campaign to sell a product or service. In fact, unless you know what you’re doing, or hire a professional, a major return isn’t guaranteed. Perhaps the most important point though, is the second: word-of-mouth and the customer referral are incredibly powerful. Potential customers are far more likely to be wooed by positive feedback about a good or service from an actual customer (and someone they trust) than any advertisement you could purchase. That doesn’t mean you should nix the ad campaign you’ve developed for your small business or start-up. It simply means that you shouldn’t count out word-of-mouth as a powerful tool that could actually help stimulate sales for your business. Amazon certainly hasn’t—and it’s paid off.

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Tags: advertising, amazon, marketing, small business
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Kindle Won’t Kill Book Biz – Yet.

Friday, June 6th, 2008

This week we asked you whether small booksellers should feel threatened by the Kindle, Amazon’s newish electronic book reader-browser-toaster oven-in-one. Not surprisingly, the results were split nearly down the middle, with the majority of you saying that you don’t believe Kindle will ever present any true competition for paper books or the bookshops that sell them (although newspapers, which are already having a hell of a time, may be a different story). The reasons most of you cited primarily had to do with the touch, feel, and portability of books. Good points all, but I’m fairly certain that some writers were making the same assertions about the typewriter when the first word processing program came out. Still, reader Mahesh makes a good argument: “The mass market paperback (and even trade and hardcover editions) still have the same price, portability, and convenience edge that they’ve enjoyed for ages, particularly over the $360 Kindle.” Until the price drops on those babies, for many people, it’s logical that books will be the way to go (And yes, BryanH, we realize hardcovers only cost $9.99 on the Kindle—cheaper than their $30 paper counterparts, but still).

On the flip side, those of you who said that paper books will eventually go the way of the “vinyl EP” made some damn good arguments too. Yes, the price will eventually drop—making the Kindle more accessible to more people. And the Kindle is certainly more green than your traditional paperback books (although check back in a ten years to see if the average consumer is still in a frenzy to buy green). But above all, the reason the Kindle is the most threatening to small bookshops is because it offers the kind of quick convenience, speed, and access to multiple books—even the newest and most obscure—that a single bookseller could never offer.

Nonetheless, the verdict for now among our readers is that the bookstores are sales safe.

Check back on Monday for next week’s survey question!

Kindle

Tags: amazon, small business, survey
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Is Amazon’s Kindle A Threat to Small Booksellers?

Monday, June 2nd, 2008

Last Friday at the BookExpo of America in LA, Amazon.com founder Jeff Bezos held a seminar plugging the company’s new product, the Kindle, to a roomful of booksellers and publishers. The response, according to the New York Times (via CNET), was excitement tempered by concern. In case you’ve been hiding under a rock since November, the Kindle is an electronic reader that provides users access to books, newspapers, blogs, and more. It sold out on its first day, and Bezos says that it already makes up 6% of the company’s unit sales of book, a figure that many suspect will continue to grow exponentially. While that’s a good deal for Amazon, the Times reports that the Kindle’s success has some small booksellers freaked:

“It certainly does feel like a threat,” said Charles Stillwagon, a manager at an independent bookstore in Denver.

While Bezos claims that Kindle owners tend to purchase paper books as well (at least through Amazon, which is a good thing for him and publishers), even some publishers say its not so. One publishing exec notes:

“We don’t see people buying both versions,” Shanks said. “I think there is almost a one-to-one cannibalization.”

Which brings us ’round to this week’s survey question. Are electronic readers like the Kindle eventually going to stomp out small book sellers by making paper books obsolete? Or is this just hysteria?

Tell us what you think in the comments section below!

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