The profit margin for Amazon’s new investment — the kindle tablet — is relatively low. In comparing its prices with the other brands in it’s market, it is really low and really risky. It’s prices are extremely competitive even though Amazon has been continually investing in its development of the kindle.

Is this a wise idea for Amazon to keep its marginal profits low?

I think it’s smart if Amazon can sustain growth, but it is also an extremely risky move. For a month, Amazon actually underestimated the number of kindles that were to sold. It was such an amazing hit and it definitely had to do with the cost of this tablet. The prices are so low that it has been on news articles.

Amazon forecasts slow months to come, whichll include Christmas. Amazon’s profit margin is only 4% while many other technology companies maintain a 20% margin more or less. This is a huge problem for investings into this company. Investors are questioning whether or not this is a good company to invest in because they don’t think they’ll ever get money with investing into Amazon.

Yes and no. Its highly risky and comes with its up and downs. Its causes frustrations in terms of investments from investors and it frustrates other companies in the field because of the extremely low prices. Furthermore, it makes it harder for Amazon to invest in advancing Kindle’s technology/features.