The Kindle Pricing Strategy & The Kindle Pricing History

The Kindle Pricing Strategy & The Kindle Pricing History

Some people criticized the original price of the Kindle 2 after accusations surfaced about the device’s production cost. More questions have come up about the feasibility of Amazon’s business model concerning their Kindle store and the selling of eBooks online, especially when many of the titles are completely free. Amazon has since decreased the price of the Kindle 2 device and refined the pricing strategy of their Kindle store.

The Kindle Pricing History

The original Kindle, which was so hotly anticipated it sold out online in a matter of hours, was first released in November of 2007. The device remained sold out on until April 2008, although many used devices were available online at eBay and Craigslist. Amazon initially priced the Kindle at $399, a price they soon lowered to $359.

In February 2009, Amazon began selling the Kindle 2 for the same price of $359. In April of that year, PC World released an article revealing each individual Kindle 2 only cost $185.49 to build, giving Amazon a supposed $173.51 in profit on each sale. This seemed exorbitant, but that estimate failed to take into account the cost of the Kindle 2’s software.

Nevertheless, in July of 2009 Amazon lowered the price of the Kindle 2 to $299. This price reduction was related to the release of the much larger (in terms of physical size and storage capacity) Kindle DX, which sells for $489, in June of 2009. Amazon further reduced the price of the Kindle 2 to $259, where it stands now (as of January 2010), in October of 2009, just in time for the start of the holiday shopping season.

The Kindle Pricing Strategy and Business Model

The Kindle Pricing Strategy

The Kindle Pricing Strategy

The business model behind Amazon’s sale of eBooks and other materials via their Kindle store has also received criticism. The Kindle 2, released during a major economic recession in the US and elsewhere, was seen as a luxury product beyond the reach of most Americans.

Many felt the initial price of the device, combined with the average $9.99 price of New York Times bestseller titles, was out-of-touch with American spending habits. At a time when avid readers may be forgoing purchasing new books in favor of checking books out of the library or buying books used in order to keep up with their reading habit, people wondered how Amazon planned to make money from the Kindle 2.

But by the end of 2009 Amazon had sold 1.5 million of their Kindle, Kindle 2, and Kindle DX devices. As of Christmas day of the same year, eBook sales to Kindle owners as well as users of the Kindle app for iPhone and iPod Touch, and the Kindle for PC software, overtook printed book sales.

Amazon stated that the Kindle is its most popular gift purchased that holiday season, and as these new Kindle owners strive to fill their readers with e-books, they will only fuel more sales and fill Amazon’s coffers. Despite some controversy, it seems the Kindle device and the Kindle e-book store are here to stay.

You can buy a Kindle via our Amazon link, and we’ll make a tiny commission, which will help keep the doors to this site open.

This is part of a series of blog posts we’re publishing about various ebook readers. The other posts in this series include:

More appropriately, this is part of our series about the Amazon Kindle,which includes some of the following posts: