Why Owning an Inexpensive Kindle Could Cost You Hundreds

Survey indicates Kindle users spend $443 more annually than regular Amazon members

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Amazon’s strategy with its Kindle e-readers and tablets has always been pretty clear: bring in more customers, even at a loss, so long as they partake of the online retailer’s panoply of services, from e-books to streaming movies. Unlike rival Apple, which sells its devices at a premium, Amazon has seemed more or less happy to break even or lose money on its devices. Now, a report based on research by Consumer Intelligent Research Partners (CIRP) shows how shrewd that strategy may be.

CIRP surveyed 300 U.S.-based Amazon customers over a period of three months this fall. Based on the results, the firm estimates that Kindle owners spend about $1,233 per year on the site, compared with $790 for Amazon members who do not own one. In other words, Amazon members with Kindles spend $443 more annually.

“Another way to look at Kindle Fire and Kindle e-Reader is as a portal to Amazon.com,” Josh Lowitz, CIRP’s co-founder, wrote in a release.

If that is the case, Amazon’s strategy appears to be as effective as analysts have suggested.

64 comments
libby.xyz
libby.xyz

I have a Kindle Fire.  I read more ebooks from my library than I buy from Amazon.  But we are prime members from Amazon and do order frequently from them.  But that was the case before I got my Kindle.  

ChrisRapier
ChrisRapier

Because of the Kindle I do spend more money at Amazon - specifically on books. Which I then read. Then I feel better for having read more and exposed myself to new ideas and literature. Which is why I got a Kindle in the first place. Makes sense to me - I don't get the breathless tone of this article though.

JohnDeltuvia
JohnDeltuvia

Actually, owning an inexpensive Kindle can save you money over just having a Kindle app on a computer - because then you have access to the free lending and borrowing features. Owning a slightly more expensive Kindle gives you the same. And in any case Kindle books take up less storage space and cost less than books you would have bought anyway.

blath1981
blath1981

I'm a little concerned that business.time.com doesn't seem to understand the mechanics of business just based on this misleading headline.

persuter1
persuter1

Wow, so if we take the set of Amazon users who have purchased a particular item costing over $100 on Amazon, we find their average spending is higher than the average Amazon user? What a huge shock. 

LawsHouse
LawsHouse

How typically idiotic of a times reporter. You have the cause and effect backward, it should say people who spend more on Amazon are more likely to buy a Kindle.

goblue562
goblue562

One of the dumber articles that I've ever read..  All it means is that people with Kindles will spend more money ON THE AMAZON SITE... Not in general.  So, did you take into consideration that people without Kindles will go to movies in the theaters, and then spend money on popcorn and a soda?  Or that they buy books from bookstores?  Or spend more money on their cable bill?


Time has lost its image as a world news reporting site when it publishes idiocy like this.

RalphBalogh
RalphBalogh

hmm,  does this mean that people who have money (or have a job and earn money), spend more money than people who do not have money (or do not have have a job or do not earn money)?


So to save money, should I quit my job?

ottodriver
ottodriver

The title of this article is ridiculous... the implication is that buying a less expensive Kindle will ultimately cost you more than buying a more expensive one, but nowhere in the article is that substantiated. A better title would be "Time.com copywriter posts misleading article, loses job."

JeffWMontague
JeffWMontague

This article is ludicrous. "Survey indicates that when you buy a car, you are more likely to spend money on gas."

FreeRangeRadical
FreeRangeRadical

Do iPad owners spend more on iTunes than non-iPad owners?

Adaptagirl
Adaptagirl

The Kindle does not cause you to spend more. In fact, e-books for the kindle cost less than hardback books, or even than some paperback books. Plus, they are environmentally friendly. If people spend more, it's because it's more convenient. One could reason that people are reading more because of their Kindles, and that would be a good thing. There are also a host of free books for the Kindle that aren't available for free in print, simply because the cost of materials.

Bonnerauthor
Bonnerauthor

I expect people who watch QVC or Home Shopping Network spend more on QVC and Home Shopping Network than people who don't watch the channels.  TIME, quit hiring minimum wage writers

Lindy4
Lindy4

This is silly.  


The "news" here is that Kindle owners spend more at Amazon, right?  Maybe they got unbelievable deals!  Maybe they saved tons of money they would've spent elsewhere.  Of course, maybe not.  Are Kindle owners paying more for the same goods at Amazon as those shopping through the web site?  That would be a story.


As written, though, is totally non-news.  Amazon's most faithful customers spend more at Amazon.  Big whup.

SakuraSandra
SakuraSandra

Well of course having an e-reader or tablet is almost like having a 24-hour store at your fingertips!  You might not make that impulse buy of a book online if you have to actually get up and go turn on your PC to do it, but one-click on your phone or e-reader?!  SURE! 

DavidLevine
DavidLevine

It is also reasonable to say such folk save money. Just because one spends more at Amazon does not mean they spend more overall.

It could be argued Kindle owners spend more at Amazon because they find better deals there then elsewhere and have easy access to the amazon site rvrn when away from the computer.

actorma
actorma

This is a ridiculous article.  Correlation does NOT equal causation.  Just because someone bought a Kindle doesn't mean that they are buying more on Amazon because of the Kindle itself.  There are numerous factors that they neglected to mention like average income of the Kindle owners vs. the non-owners, the technological skill of Kindle owners vs. non-owners, etc., that could all add up to people who HAPPEN to own Kindles spend more money because they are 1) richer, so naturally spend more, 2) are more web savvy so purchase online vs. brick and mortar more, 3) any number of other socio-economic reasons.  Unless the study specifically mentioned that Kindle owners directly purchase $400 of books and movies (which this article doesn't mention), then I'd go with reason #1 -- people who buy Kindles just buy more crap than other people.

felinesrule
felinesrule

I'll stick with an actual book, thank you.

inkandskin
inkandskin

FYI to those who don't know: you can download free e-books to your Kindle with a library card. Ask your local librarian for help.

HerbStiles
HerbStiles

What a stupid useless article.  Of course we Kindle owners spend more with Amazon. That's why we bought it in the first place.  What about iPad users? How much do they spend with iTunes?

RichardWad2u
RichardWad2u

So, Time Magazine continues their spiral into journalism oblivion by posting another article resonating with stupidity. Let me explain to your simpletons at Time: Owning the Kindle does not cost the owner HUNDREDS of extra dollars. The fact that they have chosen a Kindle over other devices obviously means they are loyal to Amazon, whereas someone with an iPad probably feels the same loyalty to iBooks. Did anyone bother to poll what owners of ALL devices spend on average with ALL ebook vendors? No, of course not. Because that might actually make sense. Where in the world is Time hiring their writers from? Temp agencies?

FelixDiaz
FelixDiaz

it probably has nothing to do with owning a Kindle.

rpasley
rpasley

Is this supposed to be an insightful piece of journalism? It's laughably flawed, especially in trying to conflate purchasing trends to the different business models of Amazon and Apple.  Why, I'll bet that purchasers of iPads, suckers that they are, buy ten thousand percent more apps from the Apple Store than do purchasers of the Kindle who do not also own an iPad....and that's a conservative estimate! 


Critical thinking is, sadly, becoming a distinct outlier for those who write for HP....it's all about getting clicks with moronically written content...

Kaitensatsuma
Kaitensatsuma

You can say the exact same thing about owning a Razor - Thats how they Getcha - 10 dollar razor, hell, they'll throw in a blade for free, pack of three razors? 15 dollars bitch, thats what the article is trying to get at. What you should do INSTEAD is either buy a sharp knife and never need a razor or buy a 100 dollar shaver and watch it break in a year or so.


Anyhow, how does a "Buy Premium - Pay More Premium" end up costing less than "Buy cheap, Pay for whatever"?

JonathanFeniledeCastro
JonathanFeniledeCastro

It might also be that people who spends more at Amazon are more likely to have a Kindle.

mediorite
mediorite

Gee, and I bet people who buy expensive iPads spend hundreds more on Apple apps than people who don't, too. Shocking, I know.

miketheobtuse
miketheobtuse

I love that this is what passes for reasoned, logical thought in journalism.  Does the author consider that the $443 extra spent through Kindle services were for items that other shoppers likely purchased through other retailers?

GlenAhern
GlenAhern

Will it actually help Amazon to stop losing money every year?


ericmbacon
ericmbacon

So you are saying that people who buy the hardware specifically for those services will also spend money on those services? Weird. 


Headline: People who purchase Playstations spend hundreds more on video games than those who buy dishwashers.

jpkane210
jpkane210

This is an absolutely ridiculous article.  It only compares Kindle Amazon shoppers with non-Kindle shoppers.  Nowhere does it compare Kindle owners with other book buyers, electronic or print.  Yes, I buy more Kindle books than I buy print books, but I also read more than the average person.  Quite honestly, it looks like someone is just trying, rather badly, to justify their paycheck. 

BluNote36
BluNote36

This is a poor article that doesn't explore any other options. Maybe people that buy the kindle tend to spend more money anyways. Maybe they have more money to spend to begin with. Lets move past this conjecture journalism that sees correlation as the same thing as causation, over and over again.

BeckyBrett
BeckyBrett

Just like with anything, you need to be choosy with what you purchase.  I still only buy the books on my kindle that I would have bought at the book store.  My library is filled with free books which Amazon offers every week. The only additional expense was for the case to put the kindle in. I only watch the movies/tv shows that are free via amazon prime which I already had for the 2 day shipping benefit before I purchased my kindle. So, I've probably saved money because the kindle books are cheaper than purchasing the hard covers.  And...I've saved my shoulder and back because instead of lugging a hard cover book around in a large purse...I can read right from my iphone which i'd have with my anyway. (I never like to be without a book...since 5th grade I've always carried a book with me)

KSgirl
KSgirl

I love my Kindle Fire and am happy to spend money via Amazon for books and apps.  I can surf the internet, play games and read books all on a small portable device.  Even though I still have hardback/paperback books in my library at home, it's nice to get on a plane or sit down at lunchtime and pull out my Kindle instead of pulling out a bulky book!!    

Tojuro
Tojuro

I used a Kindle eInk device, but switched to a Nook after Borders shut down.    

The problem is that Amazon gets rewarded by Wall Street for increasing revenue, but doesn't even have to turn close to a real profit (their stock went up 50% last year and the company lost 100 Million dollars).   In the process of this reward-for-failure cycle, they are killing off 'real' bookstores.     Then what happens when Barnes and Noble goes under?    There will be no book stores, Amazon will dominate book sales, have no reason to compete and have no feasible competitors.   

JudithRosa
JudithRosa

I don't mind giving Amazon my money when it means I can buy my books without having to wait for the bookstore to open, hop on a train, slog through the snow, waiting in line, etc. Not to mention that the price for most books is way less for the Kindle version.


Most important for me is that living in a NYC apartment, space is at a premium and now I can have all the books I want and can afford stored in a device that is just 6" tall.

bakshisanjay
bakshisanjay

When people buy more books because they own a kindle they do it because: (1) they love the medium; and (2) they recognize that they save a lot of money and trees by not buying paper versions of the same books.

For instance, take a look at Warren Buffett's letters— the accumulated wisdom of one the world's smartest men. You can buy that book in paperback version for $27.90, wait for it to arrive the next day (at the earliest), feel guilty about killing trees, and feel the inconvenience of lugging it around.

Or, you can buy the Kindle version for $2.90 (that's 89% less than the price of the paperback version), get it instantly in digital format, and carry it around along with hundreds of other ebooks in your kindle library...

http://www.amazon.com/Berkshire-Hathaway-Letters-Shareholders-Buffett/dp/1595910778/

As Buffett himself says: Price is what you pay. Value is what you get.

veggiedude
veggiedude

@Lindy4 If you bought a $1000 flat screen TV for $600, you did not save $400 - you spent $600!!!

JonathanHershaff
JonathanHershaff

@actorma These articles make me want to pound my head against the wall.  How do articles lacking such a basic understanding of statistics make it into publication?  I really want to cry sometimes.  

SakuraSandra
SakuraSandra

@inkandskinOnly certain publishers do this though, so there are lots of books you still need to pay for if you want to read.

RichardWad2u
RichardWad2u

@mediorite ...and the genius who wrote the article is a Senior Editor at Time. I guess they had to bust out the big guns to drum up this level of stupidity.

RichardWad2u
RichardWad2u

@miketheobtuse it's mind-boggling how someone at Time thought this article made sense or had an ounce of journalistic credibility. 

JerryBallard
JerryBallard

@miketheobtuse Frequently, 'yes'. Its called 'reducing friction', or in other words, making it so easy to push the 'buy' button on a whim that you don't bother thinking about it.

JerryBallard
JerryBallard

@GlenAhern Amazon doesn't make its money on sales. They make it on what we used to call 'the float'. The lag between when they get our money and when they pay their suppliers is so dramatically more than any other company that they make billions simply on being able to hold onto and invest the money in that 90 day (or whatever) period. 

Bezos is not a technologist... he's a Wall Street guy. That's where he made his first fortune. 

And a brilliant one, I have to admit.

ShaunConnell
ShaunConnell

@Tojuro Lol, they're not "failing" by not turning a profit... they're reinvesting the money. They could easily become insanely profitable, but they don't want to because they have way more growth to worry about. Amazon is just getting started. 

If you don't understand why, look up the CEO's first shareholder letter.

bookmanjb
bookmanjb

@bakshisanjay Google "rare earth metal shortage" Your comment about how Kindle saves trees is kind of hilarious.

ShaneNokes
ShaneNokes

@veggiedude@Lindy4 Yes, but if you were already intending to buy that flat screen at a regular retailer for $1000, and Amazon can get it to you for $600 then you have indeed saved $400.

There's now $400 more than what would have remained if you had purchased it at the regular retailer.

bookmanjb
bookmanjb

@ShaunConnell @Tojuro They make their money on the float. That's why they have an army of lawyers working to head off the inevitable anti-trust suits they will have to face when the competitors whom they are unfairly underselling come at them with class actions. If they actually TRIED to make a profit they wouldn't be able to compete.