It’s been three days since Tim Cook unveiled the new iPad, but you’re still stuck with your trusty old iPad 2. You’re keen to get rid of it so you can buy the new one, but you forgot to log in to one of those buy-back sites before Wednesday’s launch. Predictably, the announcement sent trade-in values plummeting—before the launch, some of these sites were offering close to $300 for your entry-level iPad 2 (the 16GB Wi-Fi model), provided it was in “good” condition. Now they’re willing to part with far less.
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I’d skip by all of these sites and instead log in to Amazon. As of right now, its trade-in service is offering $288 for a 16GB Wi-Fi iPad 2 that has “normal wear,” and up to $320 for one in “like new” condition. Indeed, Amazon Trade-In’s lowest offer for an iPad 2 is $236, about what others are offering for “good” models.
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What’s going on here? Considering that Apple is selling new iPad 2s for $399, how can Amazon afford to shell out up to $320 for your old one? What’s it doing with all the iPads it’s buying? Is Jeff Bezos running a charity?
Nope. There’s one catch to Amazon’s trade-in program, and it’s brilliant. While other sites will give you cash for your old goods, Amazon will only give you store credit. Thus, the “extra” money you get from Amazon compared to other trade-in services isn’t a total loss for Bezos. All that cash will be plowed back into Amazon’s own business.
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If you use your trade-in money to buy a device or service that keeps you locked to the company for a long time, Amazon might end up making more money on you over time.
What kind of purchase would yield that sunny scenario? There are a couple obvious ones—purchases that might be especially appealing to the sort of early adopters who trade in their old iPads to buy new ones: If you use your trade-in cash to buy a Kindle or subscribe to Amazon Prime, Amazon wins.
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One analysis says that after joining prime, the amount of money that a customer spends at Amazon jumps from $400 per year to $900 per year.
Link to the rest at PandoDaily
And if you use part of your iPad 2 trade-in credit to buy a Kindle Fire, Amazon won’t be unhappy either.