Amazon.com, Inc. (NASDAQ:AMZN) is aggressively pushing its sales in time for the holidays by luring customers with up to 65% discounts on its Cuisinart items. The black Cuisinart CPB-300 SmartPower 15-Piece Compact Portable Blending/Chopping System, which is originally listed with a price of $130 is now available for only $53.99, with customers getting a 58 percent savings of $76.01. The Cuisinart GR-4N 5-in-1 Griddler, on the other hand, originally comes with a list price of $185, but is now available at $64.99, giving buyers a substantial discount of 65 percent at $102.01.
According to 24/7 WALL ST, the Cuisinart CPB-300 SmartPower 15-Piece Compact Portable Blending/Chopping System costs more that its offer price of $53.99 to make, implying that Amazon.com, Inc. (NASDAQ:AMZN) is selling the item at a loss. And this is at a time when the company has its investors worrying that the e-commerce firm is getting it wrong in a number of ways.
For instance, Amazon.com, Inc. (NASDAQ:AMZN)’s recent announcements of debt issuance has garnered a Moody’s downgrade from “stable” to “negative”, with the credit rating agency noting that the debt issuance aggravates the company’s inherently weak interest coverage due to lack of transparency surrounding the proceeds of the debt facility, among many other factors, although affirming Amazon’s Baa1 senior unsecured rating on grounds of excellent liquidity as a sufficient buffer for the company.
A third quarter report detailing a loss of $437 million also made investors unhappy, but Amazon.com, Inc. (NASDAQ:AMZN CEO Jeff Bezos was quick to defend the company’s lack of profits, saying that Amazon is a large company but still a startup.Bezos further argued that “there is a lot of volatility in start-ups”.
While offering discounts is one of the classic marketing strategies known in the retailing industry, and for that matter in the business of selling in general, Amazon.com, Inc. (NASDAQ:AMZN)’s latest attempt at using large discounts to boost sales is seen as one among the company’s unsuccessful ventures.
This article has been written by Nonito Guntan.
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