What is the catch: cellphone plans online

I have recently been HATING my current cellphone. It has been dropping calls and randomly calling people. The touch screen also never works properly and it takes me about ten minutes to send a short text with all the corrections I have to make. At the same time I really want to get a smartphone. I was looking online at the Motorola DROID and I am pretty sure that is what I want. I went into the store and played with one, I really liked it. The thing is, I am currently connected with a family plan that my sister holds. I am nowhere near the end of the contract OR the free upgrade for a new phone (I think we have another year). We are currently with Verizon, which is the service the DROID is connected to.

While I was researching online, I saw Amazon was selling the phone (with a 2-year contract) for $49.99. This is versus $199.99 on the Verizon website. Now, this would almost make the cancellation fee on my old phone worth it. So I guess my question is, What is the catch? Why is it so much cheaper through Amazon? I also found the same deal through a site called Wirefly, which I haven’t used before. I must be missing something, but I can’t figure out what it is. Please help me!

Not unusual. Costco almost always has better deals than the plan providers. Sometimes by hundreds of dollars.