Comment by theduncan
8 years ago
I think the closest real analogy to what your thinking is Amazon, where they sell things like the Kindle line of items, close to price. In the hope that you buy more stuff from them.
Look at the fire tablets, you have a 7" for $50, there is no way there is any profit in that price.
Looking back, I think the couple folks who were adamant about "you can't do that" were thinking of "dumping". Yet... it does happen, plenty. I think they're more favorably called "loss leaders". Well, different purposes behind them, I know, but yeah, Amazon is not making any substantive profits on some of those fires, but if you start renting movies from them... bingo.