Amazon Charging an MP3 Premium

Amazon Charging an MP3 Premium

Amazon Charging an MP3 Premium

Moneybox
A blog about business and economics.
March 22 2012 12:58 PM

Amazon Charging an MP3 Premium

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It's obviously cheaper to produce an extra copy of an MP3 than to manufacture a CD. And a CD is in most respects better than an MP3, since you can make MP3s out of CDs. And yet I just went over to Amazon.com to buy the new Shins album and I saw that they're pricing the MP3 as slightly more expensive than the CD.

This is, I'm guessing, a good example of a price discrimination tactic at work. Amazon accepts a lower margin on the CD option in order to create an opportunity to snatch up some highly price sensitive buyers.