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Comment by timdorr | Hacker News Reader

Great. Another iSuppli teardown that's going to cause everyone on the Internet to cry foul at how Amazon is charging 48% mark up on it's devices. Yes, because these things build themselves, weren't designed by anyone, get shipped through instantaneous teleportation, market themselves, and do their own support...

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50% mark-up is pretty standard for retail items. I'm surprised the Kindle mark-up is not higher.

The only reason it isn't lower is because they can't make them fast enough.

I'm sure Amazon would sell these at a small loss if it meant grabbing marketshare. The most convenient way to get a book on the Kindle is through Amazon.

I've converted a number of pdfs and send them to my kindle by email or usb. not hard at all.

You are, at the very least; in the upper quartile of technical ability of Kindle owners. You underestimate what the typical user is able or interested in. It's not that they couldn't figure it out if motivated. But mostly just that they can't be bothered.

Emailing to your Kindle means going through Amazon still; to convert and over whispernet to your Kindle.

It's not 50% mark-up, it's 93% mark-up: $185.49 to $359.00

That depends on how you read the phrase "50% mark-up". I read it as 50% of the retail price is mark-up, the other 50% is cost.

http://en.wikipedia.org/wiki/Markup_(business) is generally accepted.

exactly: ($new-$old)/$old gives you % change which is ~93%.

Cost is determined by how much people are willing to pay, not by the price of their components.

Of course knowing what goes into making one if these would help a competitor find a lower price point.

Cost is actually determined by both the demand and the supply. This is because Amazon hypothetically takes into account their marginal revenue (which comes from demand) in relation to the cost of producing it, in figuring out a price point. Specifically, producing up to the point where MR = Cost. (Sorry for being an econ snob)

In the "long run", yes. In the short run they may be unable to increase production.

This is good news. It means that, given enough competition, prices can fall pretty fast. Even better news is that the E-Ink display makes up most of the cost, so if the prices on those go down, it could make a big difference.

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