Amazon is the benchmark for retail corporations. The company has been the best out there and has dominated the market for many years now. When compared to its peers and competitors, Amazon is way ahead of them as it provides best quality products in comparatively lower prices. The retail stores such as Wal-Mart, EBay, and Target etc. have been chasing and trying to match the prices with the largest retailer in the United States. The company expanded its business into more product categories, but it failed to make its mark in the phones market.
The company act boldly when it mentioned the price tag of $199 over its Amazon Fire Phone. Market dominators such as Apple and Samsung Galaxy were selling their top phones at $199 and Amazon, after being a new entrant in the market; price tagged its phone on par with its strong competitors. However, this decision let the company down as the company was not able to sell many phones and over more than half of the Fire Phones was left unsold. Hence, AMZN is selling an unlocked version of its Fire phone at a slashed price in the hope Black Friday shoppers will give the widely panned device a chance.
It can be called as a Fire Sale. A few months back, the company cut off the prices of Fire phone to as low as 99 cents in order to revive its business after failing big time. Amazon revealed in its quarterly earnings call last month that it took a charge of $170 million for “inventory evaluation and supplier commitment costs” for the Fire, which failed to create a spark in the smartphone market. Critics have said the Fire is less a phone and more a “shopping machine” designed to capture more Amazon customers.
Hence in a nutshell, the company could not benefit from its expansion into more and more product categories. However, apart from the smartphone market, the company is doing a good business in other segments.