Why did Amazon.com decide to provide Harry Potter e-books free ?

An article in the Wall Street Journal (May 11,2012) describes a decision by Amazon.com to provide Harry Potter e-books free to libraries, while paying book publishers the wholesale price. The article argues that Amazon will obtain profits from other purchases by customers from their website – shirts or bug spray. The new strategy will also promote use of the Amazon website by library patrons. Could the costs to Amazon be covered by the margins from incidental purchases ? Is this a strategy to expose ecommerce ease of use to a potentially new segment of customers or do you expect that these customers are already ecommerce savvy ? What other loss leader strategies might Amazon consider to compete in the future ?

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About aviyer2010

Professor
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