Amazon Kindle Fire Sellers Hang in There
November 19th, 2011 by Skip McGrath
Amazon hit all of us who purchased Kindle Fires to resell when supply is short with a big backhand when they announced they would do two things.
1. Amazon is selling the Kindle Fire at a small loss. It costs them $209 to manufacturer and ship each Kindle, but they are selling it for $199.
2. Because of this Amazon had to get as many Kindle Fires out to market as fast as possible so they could recoup the loss with book, movie and music sales. Therefore they manufactured a large supply and besides selling them online they are being sold in large chain stores such as Target, Wal-Mart and Best Buy. So right now there are plenty of Kindle Fires in the supply chain.
But this won’t last long. One of my sources at Amazon told me the sales are exceeding expectations. This means the supply should tighten up soon. The very worst case that will happen is if the supply doesn’t tighten up, you will still be able to sell your Kindle Fires for what you paid for them and get your money back with perhaps a small loss in eBay fees. But I am very hopeful that the supply will tighten up soon and you will see Kindle Fires start selling on eBay for more than the $199 Amazon price.
I don’t think the prices will reach insane levels like what happened with the new iPads, but I do expect to see prices in the $249 to $299 range as we get closer to Christmas.
So don’t panic. I am still sitting on the ten Kindle Fires I bought (less one for myself). Lets see how things play out over the next couple of weeks.
Here is a comment that just came in from Jordan Malik –
Two more factors are pointing to the Kindle Fire being in WAY short demand AND reselling for a high price:
1.) Retail analysts’ estimates of Kindle Fire 4th quarter orders are now up to 7M. (See screen shot: http://screencast.com/t/TKsd07BOoRy)
2.) ebay Purchases of Kindles have hit a high of $349; and a high of ~$260 for *PRE-ORDERS* (i.e. customers were clearly told their order was a pre-order)
It’s still way too early to tell exactly how reselling will go for the Kindle, but I am still confident that Amazon will not be able to keep up with orders (i.e. there will be delays due to orders clogging up their pipeline; and there will be delays due to several ‘out of stock’ notices on Amazon because I believe the overseas bulk shipments of Fires to Amazon will not be able to keep up with the demand.