Amazon.com’s CEO Jeff Bezos told some stockholders that even though they have 1 million orders of the latest Harry Potter book, they aren’t going to make a profit.
Amazon.com Inc. has taken more than a million pre-orders for the final “Harry Potter” book due out in July, but the world’s largest Web retailer won’t make a profit, Chief Executive Officer Jeff Bezos told shareholders at the company’s annual meeting Thursday.
Amazon’s handling of the “Harry Potter and the Deathly Hallows” release – a $17 discount off cover price, a free shipping offer and guaranteed on-time delivery – showed yet again that the company is willing to take a hit to cement customer loyalty.
Customer loyalty?! It’s the biggest selling book this year, if not possible this decade. In an era where someone who moves 30,000 books in a week is doing well, Harry Potter is doing far better. And considering the success of the previous books, this was not a surprise.
But Bezos seems to think that customer loyalty is more important than making a profit on the biggest bestseller of the decade.
Had they offered a $10 discount price, I’m sure they would have moved a million books still, and that would have made a difference of $7 million dollars. The pricing in this case is amazingly silly and foolish. If 1 million people are buying books from your site, you don’t have to worry about customer loyalty. You just need to worry about the happiness of your shareholders.