What We Can Learn About Marketing From the New Amazon Tablet

While the Internet is ablaze with posts and articles about Amazon's first entry into the tablet market – the Fire, many people have missed the marketing significance of this entry.

As I had been discussing with Yael, Amazon could give away the tablet as long as that encouraged people to switch from buying physical books on Amazon to buying ebooks on Amazon.

Why? Because physical books have inventory costs, warehousing costs, handling costs, packing costs, shipping costs, etc. And ebooks don't have these costs.

Even without access to Amazon's financial records, we can predict that, in the long run, ebooks will be more profitable for Amazon than physical books (whether hardcover or paperback).

So when Yael came across Barry Graubart's post How the Kindle Fire Changes the Digital Landscape, she and I both jumped on the main point:

[While] both Amazon and Apple want to "own" the delivery of media to consumers, their strategies are completely opposite of one another. Apple makes its money on hardware. Music, books and video are simply a means to sell more devices. Amazon, meanwhile, makes its money selling media. Devices are simply a means to sell more books, music and video content. [boldface mine]

What is the relevance of this to marketing in general?

Marketing decisions must be based on individual criteria and NOT one size fits all.

Apple can afford to make content acquisition less expensive while keeping the price of its hardware at a profitable level. Amazon can even afford to give away its hardware in order to sell its content at a profitable level.

Basically, the question for all of us is:

What business are we in?

If we know the answer to this, we can target our marketing efforts to optimize that business.

P.S. If you're a book author, here are two of my recent book marketing guest posts:

Ask PZM about ebook promotion online and offline

If Your Book Is Available on Amazon Do You Have an Author Page?

© 2011 Miller Mosaic LLC

Phyllis Zimbler Miller (@ZimblerMiller on Twitter) has an M.B.A. from The Wharton School and is the co-founder of the marketing consulting company Miller Mosaic, LLC, which offers "done for you" and "do it yourself" social media services including marketing-focused WordPress websites.

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View information on Phyllis' books and ebooks at http://budurl.com/PZMbooks