Question

Amazon.com announced in a May 19, 2011, news release that the company was selling more Kindle books than traditional print books. From their first sales in November 2007, these ebooks have continued to grow in popularity and by the beginning of 2011 had overtaken paperback books as the most popular book format on the site. At April 1, 2011, the company was selling 105 Kindle books for every 100 print books.

Required

a. What is Amazon.com’s sales mix of Kindle ebooks to print books?
b. How do you think the contribution margin on a Kindle ebook compares to the contribution margin of a print book?
c. As Amazon.com’s sales mix approaches the 2 to 1 sales mix of Kindle ebooks to print books at Amazon.co.uk, what will likely happen to the breakeven point?



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  • CreatedFebruary 21, 2014
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