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, CEO Jeff Bezos told shareholders at the company's annual meeting recently.
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.
Bezos hammered on Amazon's "customer-centric" approach during the meeting. He told the 50 or so shareholders gathered at the Seattle Repertory Theatre that Amazon sacrifices $600m in shipping revenue each year, thanks to the $79-a-year Amazon Prime free shipping membership available in the U.S. and Japan, and other shipping offers. Bezos also showed off the "Subscribe and Save" program that lets U.S. customers set up recurring deliveries of certain grocery items and save 15 percent.
The CEO urged shareholders to be patient following several years of heavy investment in technology, new product categories and new locations such as China that depressed earnings and ate into margins.
Source: CIO Today, http://www.cio-today.com