How does Amazon manage to sell cell phones cheaper than cell phone companies?

[miri]

I cancelled my phone line and am probably going to buy a new phone with Amazon. The price difference is quite substantial. My last phone I bought from them was like - $175 !!! How can they afford to pay the customer? Why dont the cell phone companies offer these deals?

Im prob gonna buy a Samsung t519, its $99.99 from tmobile with rebate but with Amazon its like -$50!! Thats a $150 difference.

 

[Jeff7]

Cell phone companies probably sell their products for close to the manufacturer suggested retail price, which is usually higher than the actual market price. This is the case with all kinds of products - the MSRP is some overinflated price, sometimes twice what the item will actually sell for.

 

[miri]

Originally posted by: Jeff7
Cell phone companies probably sell their products for close to the manufacturer suggested retail price, which is usually higher than the actual market price.

Cell phone companies usually lose money on the cellphones they sell

If cell phone companies lose money on the phones they sell, how can Amazon sell them for even cheaper?

Example, Tmobile sells the T519 for $99.99 after rebate, that cost tmobile money to sell it for that cheap. Amazon sells it for $150 less then Tmobile

 

[Inspector Jihad]

yeah i dont get it either...i was trying to figure it out. I'll definetely get my next phone thru amazon

 

[MaxFusion16]

low overhead and lots of rebates

 

[miri]

Originally posted by: MaxFusion16
low overhead and lots of rebates

the t519 only has 1 $50 rebate

Amazon sells it for 1 penny

So cell phone companies have to pay amazon somehow, wouldnt it be cheaper if the cell phone companies just sold it for the same price so they can avoid paying amazon?

 

[brtspears2]

Resellers receive a commission from the phone company. Many times, the reseller passes some of the commission on to you in the form of lower phone prices. But many times, the reseller will have you sign a contract with them that states you cannot cancel in 6 months or else you get charged $xxx dollars.

 

[miri]

Originally posted by: brtspears2
Resellers receive a commission from the phone company. Many times, the reseller passes some of the commission on to you in the form of lower phone prices. But many times, the reseller will have you sign a contract with them that states you cannot cancel in 6 months or else you get charged $xxx dollars.

Dont cellphone companies have 1 and 2 year contracts when you buy a phone?

 

[George P Burdell]

Originally posted by: miri
Cell phone companies usually lose money on the cellphones they sell

Which they more than easily recover from your monthly payment.

 

[miri]

Originally posted by: George P Burdell

Originally posted by: miri
Cell phone companies usually lose money on the cellphones they sell

Which they more than easily recover from your monthly payment.

yeah, but why would they use amazon to sell phones? They prob have to pay a hefty fee to amazon

just say Amazon sells a $300 phone for -$50

then Amazon would proably need to recoup $350 from the cellphone company just to break even, and then they need to make money on top of that or do they?

 

[mugs]

Apparantly Amazon.com is willing to take less profit than the cell phone company. Amazon.com sells a lot of stuff, cell phone companies sell cell phones and cell phone service.

Amazon.coms deals are not nearly as good when you have a family plan, because you only get the big discounts on the first phone.

 

[Mermaidman]

Originally posted by: mugs
Amazon.coms deals are not nearly as good when you have a family plan, because you only get the big discounts on the first phone.

I noticed that too. That's why I ended getting two VW phones from LetsTalk.com. Each phone qualified for all the rebates :thumbsup:

 

[Gibson486]

Originally posted by: miri

Originally posted by: George P Burdell

Originally posted by: miri
Cell phone companies usually lose money on the cellphones they sell

Which they more than easily recover from your monthly payment.

yeah, but why would they use amazon to sell phones? They prob have to pay a hefty fee to amazon

just say Amazon sells a $300 phone for -$50

then Amazon would proably need to recoup $350 from the cellphone company just to break even, and then they need to make money on top of that or do they?

Cause everytime someone signs up for a new plan, Tmobile will give that seller a commision. Also, Amazon buys it it bulk, so it costs less. then you also have people who will just pay for the phone with no plan. Amazon probably also has a deal with Tmobile where they get exclusive rebates since they are huge front for them and they account for lots of thier business.

Any money that Tmobile looses on commision fees is made up for when you pay monthly.