Amazon has long been accused of undercutting its rivals with its Echo smart speakers, allegedly keeping competitors like Sonos from getting a foothold in the market — but Amazon CEO Jeff Bezos says that at their full retail price, the company isn’t taking a loss on these products.
During the big antitrust hearing today where Apple CEO Tim Cook, Google CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg are also facing down lawmaker questions, Rep. Jamie Raskin (D-MD) asked a pointed question about whether Amazon was pricing its Echo devices below cost. This is possibly referring to the theory of predatory pricing where a company tries to drive its rivals out of business by selling products at a loss, something Amazon specifically has been accused of, most notably with Diapers.com.
Amazon’s Bezos replied that at “its list price,” the company isn’t losing money on the Echo, suggesting it’s either breaking even or making a profit. But he also admitted that “sometimes when it’s on promotion it may be below cost, yes.”
That’s key, because Amazon’s Echo devices almost always seem to be on sale. Camelcamelcamel.com, which tracks Amazon’s price history for a wide variety of products, suggest that devices like Amazon’s Echo Dot and Echo Show are on sale as often as not:
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I personally advise people never to buy an Echo at full price because there’s always a $40-off sale, $1 promo, free giveaway, or BOGO deal right around the corner.
In 2018, ABI Research estimated that an Echo Dot cost $31 for the parts alone, suggesting that Amazon would have definitely lost some money at a typical sale price of $30. The same firm came to a similar conclusion in 2017 as well.
