Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?Multiple choice question.Amazon sold newly released best-sellers at a higher price than other hardcover books.Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.Amazon sold e-books at an inflated price because of their perceived value of portability.Amazon sold all hardcover and paperback versions of the same title at the same price.
Question
Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?Multiple choice question.Amazon sold newly released best-sellers at a higher price than other hardcover books.Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.Amazon sold e-books at an inflated price because of their perceived value of portability.Amazon sold all hardcover and paperback versions of the same title at the same price.
Solution
The answer is: Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.
Here's why: Amazon disrupted the traditional wholesale model for book publishers by selling e-books for its e-reader device, the Kindle, at a loss. This was done to promote sales of the Kindle device itself. The strategy was to attract customers with low-cost e-books and then make profits from the sales of the Kindle. This was a significant disruption to the traditional model where publishers sold books to retailers for about half of the suggested retail price.
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